In: Finance
Given info
Student loan
Annual 14667
4 year total 58558
Interest 4.45%
Home
Buying home in 7 years which is 4 years after graduation
30 year mortgage fixed interest 4.37%
House is 450kwith 15% downpayment
Cost of living
Utilities monthly
Electric 45
Phone 25
Internet/cable 115
Water 50
Natural gas 120
Gas 350
Food 400
Rent 0
Yearly expenses
Technology 1000
Car maintenance 500
Clothes 1000
Vacation 1000
Bar/clubs 1000
Salary
65k plus 5k for inflation 70k
First, let's compute your monthly (don't forget to modify your interest rate, for monthly compounding!!) debt of the student loan. Your payments will start on September 2022 and nish on September 2032. Please compute your monthly payment (using the assumptions or your real data [amount loaned, interest rate and duration]) and the total interest you will pay.
2. Compute the monthly payment of your house and the total interest you will pay on it. You have until 2025 to get the money for the down payment and you will start paying your mortgage on September 2025 and continue until September 2055. Compute the total interest you will pay.
Part (1)
Student loan payment Annual 14667
Monthly payment = 14,667 / 12 = 1,222.25
Interest 4.45%; Interest rate per month = 4.45%/12 = 0.0037
Your payments will start on September 2022 and finish on September 2032.
Nper= 10 years = 12 x 10 = 120 months
Present value of loan, L = - PV (Rate, Period, PMT, FV) = - PV(0.0037, 120, 1222.25, 0) = $118,263.84
Total interest payment = Nper x monthly payment - L = 120 x
1,222,25 - $118,263.84 = $28,406.16
Part 2
Home
Buying home in 7 years which is 4 years after graduation
30 year mortgage fixed interest 4.37%
House is 450k with 15% down payment
Amount of loan = 450,000 x (1 - 15%) = $ 382,500
Interest rate per month = 4.37% / 12 = 0.0036
you will start paying your mortgage on September 2025 and continue until September 2055.
Hence, Period = 30 years = 12 x 30 = 360 months
Monthly payment = PMT(Rate, Period, PV, FV) = PMT(0.0036, 360, -382500, 0) = $1,908.64
Hence, total interest payment = Period x PMT - PV = 360 x
$1,908.64 - 382,500 = $ 304,609.77