RESEARCH REQUIRED Buy a house Show all work (20) Use your income data from question 8 to determine your adjusted monthly income for mortgage qualifying purposes. Show all the facto rs you used to calculate this number. Adjusted monthly income:______________________ Use the internet or the newspaper to find a house you would like to buy. Attach the printout to this exam. How much is the selling price? _______________ Use the internet or newspaper to find a bank or mortgage brokers home - purchasing rates and terms. Only use a fixed mortgage rate product. What are the lender, rate, and term for the loan? _____________________________,_____________________,_______________ ___ Use your home listing to find the annual taxes (write that number here: __________________, or $2400 if it does not appear in the home listing. Use $300 as the annual cost of homeowners insurance. Your bank requires you to pay 0 points to get a loan, but does require you to put down a 10% down payment. How much is that? ______________________ What is your monthly principal and interest payment? (Use the table or the formula) _______________ What is your total finance charge? _______________ What is the total monthly payment including taxes and insurance? _______________ Do you make enough money to qualify for the loan? Why or why not? What is the total cost of purchasing this house

question 8

Go online and out how much money you will make in the first year of working in your profession after college. What do you want to be when you graduate? You will make how much? _____________ Rather than spend that money, pretend you will save it all up, and at the end of your first year of work you put it into an investment fund that pays 6 % annual interest, compounded monthly, for 40 years. How much money will you have when you are ready to retire? $592,500

6% annual rate compound = 6/12 = 0.5% = 0.5/100

Total period =40 x12 = 480

P= [1 + 0.5/100] ^480 = [1.005] ^480 =(10.96)

If initial salary is $50,000 (10.96) = $592,500

9)Oh oh , thats not enough. You want to retire with $1,000,000. How much would you need to put into the same fund to meet your goal after 40 years?

6% annual rate compound = 6/12 = 0.5% = 0.5/100

Total period =40 x12 = 480

P= [1 + 0.5/100] ^480 = [1.005] ^480 =(10.96)

If initial salary is $50,000 (10.96) = $592,500

If P is to $1,000,000 =(10.96) =$91,240