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Term Project

Term Project . Part 3 Katelyn Merkley Scott Johnson Spencer Wolford. The Basics. Mortgages. Amortization Schedules. Amortization Schedule. 15 Year Mortgage Analyzed: Pros . Interest Rates are lower than a 30-year loan. Builds equity quicker due to shorter amortization schedule

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Term Project

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  1. Term Project Part 3 Katelyn Merkley Scott Johnson Spencer Wolford Math 1050 Term Project Group 4 Presentation

  2. The Basics Math 1050 Term Project Group 4 Presentation

  3. Mortgages Math 1050 Term Project Group 4 Presentation

  4. Amortization Schedules Math 1050 Term Project Group 4 Presentation

  5. Amortization Schedule Math 1050 Term Project Group 4 Presentation

  6. 15 Year Mortgage Analyzed:Pros • Interest Rates are lower than a 30-year loan. • Builds equity quicker due to shorter amortization schedule • Interest paid is dramatically lower over the duration of the loan • You pay more principal a month rather than more interest Math 1050 Term Project Group 4 Presentation

  7. 15 Year Mortgage Analyzed:Cons • Monthly payments are significantly higher than 30-year loans. • Restricts loan applicants to a smaller house than they might be able to afford with a 30-year loan. Math 1050 Term Project Group 4 Presentation

  8. 30 Year Mortgage Analyzed:Pros • Monthly payments are lower than 15-year loans because the interest is amortized over a long period • Lower monthly payments free up money for investments and savings • Higher interest, increases the amount home owners can deduct at tax time Math 1050 Term Project Group 4 Presentation

  9. 30 year Mortgage Analyzed:Cons • Borrowers build equity at a very slow rate because payments during the first several years goes largely toward the interest rather than the principal of the loan. • Over all interest paid is much higher due to the long amortization schedule. • The interest rates are higher than on 15-year loans. Math 1050 Term Project Group 4 Presentation

  10. Total Interest Comparison Math 1050 Term Project Group 4 Presentation

  11. Advantage of an extra $100 • Spencer found that if he were to add an extra $100 a month to his (15 year) monthly payment, in the long run, the total interest paid would be 16,258.72, rather than $19,919.29 • Total Savings: $3,660.57 • In addition, His house would be paid off 2.5 years earlier than if he paid only the scheduled amount for his 15 year loan. Math 1050 Term Project Group 4 Presentation

  12. Conclusions • The sooner you pay off debts the more money you save in the long run • The amount the down payment put down and the monthly payment control how long you have debt • There is a linear relationship between the loan amount and the total interest paid. • Even a hundredth of a percent makes a big dollar difference when it comes to interest rates. Math 1050 Term Project Group 4 Presentation

  13. Conclusions Cont. • The interest difference between a 15 year loan and a 30 year loan is more than twice the amount • It’s rather 2.5-3 times the amount of interest. Math 1050 Term Project Group 4 Presentation

  14. Participation • Group Leader: Katelyn Merkley • Facts and Figures: Katelyn Merkley, Scott Johnson, Spencer Wolford • PowerPoint: Katelyn Merkley • Pros and Cons: Scott Johnson • Conclusions: Scott Johnson, Katelyn Merkley • Group Discussion Questions: Katelyn Merkley, Spencer Wolford, Scott Johnson Math 1050 Term Project Group 4 Presentation

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