Sarah Radcliff
SLCC e-Portfolio
Math 1030
Written Assignments
Growth Models
Buying a House
Describing Data
This project, and overall section of Math 1030 was extremely helpful in understanding common finance math. In this section, we learned different loan, interest, and annuity formulas. These formulas are helpful because they helped me understand how to figure out what my payments would be if I was to get a home loan, how to find out how much interest I would pay on a home loan, when the loan would be paid off, and also taught us how annuities, such as IRA’s work.
I included this particular project for my portfolio assignment because I thought that it was the most helpful course section so far. I’m really happy that Math 1030 included the finance section, because most people will have to acquire a loan at some point, and its helpful to understand the math and calculations regarding the loan. I think it was also incredibly helpful to teach us about annuity, so we can understand how to prepare for our retirement, and how much money we should begin saving to have enough money to retire.
REFLECTIONS...
In the "Buying a House" written assignment, students gained a better understanding of mortgage loans and interest rates by calculating mortgage payments and interest of a 30 year loan. After students figured in the down payment and monthly payments, students were asked to enter the data into an Amortization schedule to understand what portion of the mortgage payment would go to the interest and what portion would go to the principle, thereby understanding when more of the payment would begin going straight towards the principle. Then, students were asked to compare the amount of interest accrued in a 30 year loan to a 15 year loan. The goal here was to show students that, though the mortgage payments would be lower, it would be more beneficial and less expensive to pay the loan off faster, as, it would accrue less interest. Later, students were asked what their total amount of interest paid would look like if they paid $100 more a month. The goal of this question was to show the students the benefit of paying more each month towards the principle.
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This project affected the way I think about buying a home pretty drastically. Before pulling out a home loan, I would want to be sure to have a substantial down payment, hoping for at least 20% of the total cost of the home. I would also attempt to draw out a loan for a shorter period of time, that way less interest will be accrued and I will pay less for the house overall. The Amortization Chart helped me understand the benefit of choosing a shorter mortgage. It also helped me to understand the benefit of paying extra each month on your mortgage against the principle. This lowers the principle more quickly, which in turn lowers the amount of interest you pay as a whole for the entire loan. The downsides to going with this route, rather than a standard 30 year mortgage, where no extra is paid towards the principle is that the overall monthly payments would be much higher. I still think buying a home is a good investment, I just think that consumers need to be smarter about the size of their down payments and lengths of their loans. In the case of this assignment, I would save almost $90,000 dollars if I chose a shorter term loan and paid $100 more toward the principle each month. I would be able to save even more if I decided to put a higher down payment down on the loan initially.
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Throughout the semester, previous concepts have built on each other to create a basis of understanding about how to complete the "Buying A House" written assignment. Our sections on Problem Solving outlined the basics of calculating percentages. Our sections over Growth Models introduced us to the formulas used in the Finance section, which included this project. In the future, I can see myself applying many of these concepts to help me track my finances, calculate my annuity, or project the growth of my future classrooms.
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