Bristol Plymouth Regional Technical School Financing a Car and a House Project

Project 2: Financing a Car and a HouseName(s):
1. Directions: for the following loans, research 3 banks and calculate the cost of loan
(interest) if you choose to go with their bank.
Some good bank websites are: Commonwealth Credit Union, Park Federal Credit
Union, Chase Bank, PNC Bank, 5/3 Bank. You may search others as well.
Look for the interest rate on loans and terms (length of loan) if possible. Calculate three
options (different interest rates) in the table below for 3 banks. We are comparing how
the time will affect the Total Cost of each loan.
a) You are planning on borrowing money from a bank to purchase a car. You have
located the car and the cost is a 2018 year model which is priced at $10,500. You have
saved $500 and are paying that down on the car.
Bank Number 1: ________________
Principal Rate Time Interest Total Cost
60 months
48 months
72 months
Bank Number 2: ________________
Principal Rate Time Interest Total Cost
60 months
48 months
72 months
Bank Number 3: ________________
Principal Rate Time Interest Total Cost
60 months
48 months
72 months
b) Looking at the above information: choose a loan and explain why you would choose
that loan over the others.
2. Barry Husowitz bought a house for $293,000. He put 20% down and obtained an
interest amortized loan for the balance at 3% compounded monthly for 30 years.
a) Find the amount of Barry’s monthly payment.
b) Find the total interest paid by Barry.
c) Most lenders will approve a home loan only if the total of all the borrower’s monthly
payments, including the home loan payment, is no more than 38% of the borrower’s
monthly income. How much must Barry make in order to qualify for the loan?
d) Complete an amortization table using excel for the first year (12 months) of the loan,
the 180th through 181th months (only find the balance due for the 180th month) of the
loan, and the final 2 months (only find the balance due for the 359th month) of the loan.