Mortgage and Car Payment Scenario
The scenario is designed to help you determine and evaluate the payment amount of a car loan and a mortgage, based on the assumption that your household income is $36,000 per year or $3,000 per month. Based on your income, you may spend 28% of your monthly income on housing, and 10% on a car loan. You are to put a 3% down payment on the house and a 10% down payment on the car. Tasks: What is the maximum car payment and mortgage payment you can afford with the following conditions: your monthly household income, 10% for the car payment over 4 years, and 28% for the 15 year mortgage payments? Create a complete amortization schedule for the car, using the information above. Analyze the distributions of principal, interest and the balance over the life of the loan.