Part 1: Mortgage Calculator On any loan, you can look at an amortization schedule to see how much of the payment is going toward interest and how much toward principal. In the beginning, most of the payment amount is actually being applied toward interest as opposed to the principal. Nobody likes to be paying more money to the lender than what is actually being applied to the debt amount, so what can you do? Making a larger down payment will help save you money toward interest as well as paying more toward your loan each month or taking out a loan over a shorter amount of time (15 year mortgage as opposed to a 30 year mortgage). Paying an extra $50 a month may not seem like it will make much of a difference, but this section of the project will help you see how much can be saved in interest (and months of extra payments) just by paying a little extra each month toward principal. Use a loan calculator to calculate the information that follows. I would suggest using: https://www.bankrate.com/calculators/mortgages/loan-calculator.aspx You can use any loan calculator that you would like, but be sure there is an amortization schedule option. Also, if you choose other than the one given it may include taxes or insurance in the payments. For this activity, we are only interested in seeing how much money is being paid directly to the lender (which only includes principal and interest). 1. On a $275,000 mortgage (loan amount), 30 year note, 8% interest a. What would your monthly payments be? b. How much of that payment goes toward the interest in month 1? c. How much of that payment goes toward principal in month 1? d. How much of that payment goes toward interest in 10 years in one payment? (look for March 2034). e. How much of that payment goes toward principal in 10 years in one payment? (look for March 2034) f. After 30 years, what would the total interest paid be? g. What would the total cost of the house be after 30 years? (add cost of mortgage with the total cost of interest after 30 years) h. If you would pay an extra $50 a month, what would your total interest paid be? i. What would the total cost of the house be after 30 years with the additional $50 a month paid? j. How much earlier would the $50 a month help you to pay off your loan? 2. On a $275,000 mortgage (loan amount), 15 year note, 8% interest k. What would your monthly payments be? I. How much of that payment goes toward the interest in month 1? m. How much of that payment goes toward principal in month 1? n. How much of that payment goes toward interest in 10 years in one payment? (look for March 2034). o. How much of that payment goes toward principal in 10 years in one payment? (look for March 2034) p. After 15 years, what would the total interest paid be? q. What would the total cost of the house be after 15 years? (add cost of mortgage with the total cost of interest after 15 years). r. If you would pay an extra $50 a month, what would your total interest paid be? s. What would the total cost of the house be after 15 years with the additional $50 a month paid? t. How much earlier would the $50 a month help you to pay off your loan?