Quantitative Literacy
Math 1050 College Algebra
 | For this course, I have done two projects. The first one is the Optimization Porject, which is to examine the process of maximizing the volume of a container that's made from a given amount of material and minimizing the cost of manufacturing based on a set volume. Another one is the Mortgage Project. I do this in order to examine a home loan or a mortgage.
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Optimization Project.PDF Size : 3526.937 Kb Type : PDF |
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Mortgage Project.PDF Size : 5161.027 Kb Type : PDF |
Reflection
Before I do this mortgage project, I think buying a house is not a hard thing. Whenever I have enough money for paying the down payment, I can acquire a home. I think it is easy to do achieve because what I have to concern about is just the monthly payment, and I can choose to repay the loan as many years as I want. Therefore, I can choose how much to pay in accordance with my ability --> my monthly salary.
However, after doing this project, the way I think about buying a home, or a house has changed. I found that the more years I choose to repay the loan, there will be much more interest I need to pay. For example, for the same mortgage amount and the same interest rate (let say $100000 with annual interest rate of 4.975%). For a 30 year mortgage, the total amount repaid is $192704.4, including $92704.4 to be the interest. That means the total interest paid as a percentage of principal is 92.704% ; For a 15 year mortgage, the total repaid amount is $142108.2, including $$42108.2 as the amount of interest. The total interest paid as a percentage of principal is 42.108%, which is less than half of a 30 year mortgage.
In conclusion, I prefer to have a shorter period of mortgage instead of a long one. This is because I think it is not a rational practice to pay such a large amount of interest. I prefer to pay a larger amount each month but to pay less as a total. Last but not least, I've changed my mind. I do not think buying a home is an easy thing to achieve anymore ; contrariwise, it is really hard to achieve!
