5. Calculating Take-home Pay, and Length of Savings: Because it is such a large amount, most people, when deciding to buy a home, need to plan ahead and start saving for the down payment. Using the average starting salary in the career you chose after graduation as a guideline (from #2), calculate your monthly take-home pay; this is your net monthly pay after you have an average of 30% taken out for income taxes. Monthly take-home (net) pay after 30% income taxes = (gross annual salary 0.70) 12 Assuming you can afford to put aside 20% of your monthly take-home pay (Monthly take-home pay x 0.20) into saving toward the down payment on your house, use the TVM Solver app for annuities on your calculator to determine how long it will take you to save up the amount of the required down payment if your savings earns 4% interest annually.

6. Calculating Payments: Using the amortization formula, calculate the monthly payment you would have to make on a loan for the amount of your loan principal for two different loan periods (15-, 20-, or 30-years). (Do NOT use online loan payment calculators; however, check your calculations with TVM solver ) Hand-written calculations are acceptable if neat and organized. Or, in Microsoft Word, click the Insert tab and choose Equation for the equation editor.

7. Calculating Total Cost and Interest: Using the information and answers from above, calculate the total cost of your purchase; be sure to include everything you paid for the home (down payment, closing costs, loan payments, etc.) over the life of the loan for the two different loan periods you chose. Then calculate how much interest you would pay on these loans (interest paid = (total of your mortgage payments over the life of the loan) (loan principal)).

Price of home: 125,000

Starting salary: 25,000

15 year: 3.333%

30 year: 2.884%

property taxes: 1,068 land + additions: 17,500+102900=120,400 (not sure if this is needed)