P1 - Part 2: Home and Car Selection 

 
In this portion of your project, you and your groupmates will be making a few more decisions and 
doing a bit of research. You will be researching current interest rates for first-time home and car buyers, 
and deciding on a house and a car currently on the market that your group would want to purchase. Using 
these choices, you’ll find out your down payments and monthly payments on your home and car loans.  
 
 
Recall 
 
Before we begin, we must first figure out how much money we have to work with. In part 1, we figure out 
the median annual income for the career we chose, an area we wanted to live in and state and federal 
taxes for that area.  
 
What was your Annual Median Income?  $126,130 

What was your Annual Median Income after  $91,393 

taxes were deducted? 

What will you monthly income be?  $7,616 

(Annual Income - taxes divided by 12) 

Every month, you will have some basic living  $6,236 

expenses which we call “monthly essentials”. 
(see below). What is your monthly income 
going to be minus the monthly essentials? 
 
Essential Living expenses per month
● Food- $250 a month
● Electricity- $250 a month.
● Internet-$50
● Cable TV- $35
● Cell phone- $70
● Car Insurance-$300
● Water, sewer and Garbage -
$125
● Fuel (estimate) - $300
 
 
 
Home Sweet Home 
1. Budget-Masters recommend that no more than 30% of your take-home pay is spent on rent or 
mortgage payments. Use what you found back in Part 1 to answer the questions below. 
 
What was your monthly salary after taxes (before monthly  $7,616 
essentials)? 
 What is 30% of your monthly salary after taxes? (This is  $2.284 
what most financial planners recommend that you shoot 
for as your max when looking at what you can afford per 
month for housing.) 
 
2. In order to purchase a home, most people will need to take out a 15 or 30 year home loan. 
Research programs for first time homebuyers to see what annual interests rates are available, 
what requirements are there for a down payment (if any), and record your findings below. (Here is 
one resource from B​ ankRate​ you can use to get a head start if you need it.) 
 
Was the interest rate that you found through a special  Nation's Choice Mortgage 
program or promotion? If so, who was running it, and  4.125% 
what was the program/promotion called? 

What was the best interest rate that you found for  4.125% 
first-time homebuyers? 

Were there down payment requirements? If so, what  3% 

percentage? (If there was no down payment percentage 
mentioned, enter 3% here.) 

Was the interest rate for a 15 or 30 year loan? (If it didn’t  30 years (4.125%) 
specify, choose how long you’d like your home loan to 
last, 15 or 30 years.) 

What was the name of the site (or sites) where you  BankRate.com 
gathered your information? 

What site (or sites) did you get your information from?  https://www.bankrate.com/mortgage.a
Please copy and paste the link here. --->  spx?ic_id=content-page-mortgage-rate
-table#testid=10235344414_control 
 
 
3. Now that you have some information about your loan terms, it’s time to go shopping! Some 
popular retail sites have been provided below. It’s time to choose a home currently on the market 
that you’d want to purchase. With your group, find a home and record your home’s information 
below. 
Zillow​, R
​ edFin​, T
​ rulia​, ​Realtor.com  
 
 
What is the home’s current listing price?  $522,900 

Using the percentage that you found in #2, how  $15,687 

much will your down payment be? 

Since the down payment will not be included in  $507,213 

your total loan amount (yay!), how much will 
your actual loan amount be? 

How many payments will you be making?  177 payments 

 What will your monthly payments be?  $2,872 
 
Kahn​ Video on how the mortgage payment
formula is derived (derivation of the sum of a
geometric series is in there too). He uses the
1
equation P = L ( r−r
1−r
n+1 )
, where r = 1+i , P =
monthly payments, L = loan amount, i =
monthly interest amount (annual interest/12;
it’s close enough for our use), and n = number
of months paid (or 12*length of the loan in
years). Use this formula and Desmos to
determine your monthly payment.
 

Please insert a link to your listing here. --->  https://www.zillow.com/homes/1952-gibraltar-dr

_rb/ 
 
Look These Sweet Wheels! (You can maybe get them at a good deal!) 
 
4. In order to purchase a car, most people will need to take out a 3, 5, or 8 year loan. Follow t​ his​ link to 
BankRate’s online tool, which searches for general auto loan interest rates and terms. Please be 
sure to enter in your location when you search to get accurate results. 
 
Which bank was the best interest rate through?  Capital One Auto Finance 

What was the best interest rate that you found?  3.24% 

How long is your loan? (3 years, 5 years, or 8 years?)  5 years 

 
5. Now that you have some information about your loan terms, it’s time to go shopping! Some 
popular car sites have been provided below. It’s time to choose a car currently on the market that 
you’d want to purchase. With your group, find a car and record your car’s information below. 
Kelly Blue Book​, C
​ ars.com​, ​AutoTrader​, ​CarMax (Used Cars Only)​, E
​ dmunds​, T
​ rueCar  
What is the car’s current listing price?  $24,599 

Typically, a downpayment of at least 10% is recommended  $2,459.90 

(and sometimes required) when purchasing a new car. How 
much would your down payment be if you put down 10%? 

Since the down payment will not be included in your total  $22,139.10 
loan amount (yay!), how much will your actual loan amount 
be? 

How many payments will you be making?  72 payments 

What will your monthly payments be? (Use same formula  $506 
from #3.) 
 Please insert a link to your listing here. --->  https://www.carmax.com/financing/
prequal?stockNumber=15463510&op=
Search_Finance1st 
 
That’s all for Part 2! Please keep these values handy. In Part 3, you’ll be investigating the value of 
your home in the future.