All A Loan – Part 3 loan terms
Teacher Background: The job salary
information is based on a national average.
Actual salaries will probably differ in your region. You
may want to complete a local search for this
information. It is available by website at
swz.salary.com.
The mortgage rate chart is taken from:
http://finance.move.com/HomeFinance. You may want
to update this information based on current mortgage
rates. Once on the website, click on the “home
mortgage calculator” tab and follow instructions. There
is often a mortgage rate in your local newspaper as
well! Hint: If you change the interest rate, you’ll
probably want to adjust the salary information so
monthly take home pay and monthly mortgage
payments are aligned.
Goals To determine which loan option works best for
individual building projects and justify the decision
Objectives: Students will…..
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Estimate costs of building
Use a chart to determine percent over time
Practice percent skills
Standards met:
Number & Operations

work flexibly with fractions,
decimals, and percents to
solve problems
Connections:

Recognize & apply
mathematics in context
outside of class
Communication:

Communicate mathematical
thinking coherently and
clearly to peers, teachers,
and others
Time required: 1 class period
Materials: (for 30)
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Prep:
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Make
o
o
o
Make
transparencies
Mortgage Rate Chart
Jobs and Salaries
Optional: Mortgage Agreement
copies
Procedure:
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30 copies All A Loan –
Jobs and Salaries
1 overhead transparency
All A Loan – Jobs and
Salaries
30 copies All A Loan –
Mortgage Rate Reality
Check
30 copies All A Loan –
Mortgage Agreement
30 copies All A Loan –
Mortgage Rate Chart
1overhead transparency
All A Loan – Mortgage
Rate Chart
Explain to students that today you will review
loan terms, and each student will choose a loan
The first step is for students to choose a job.
Write their job options on the board. Each student should choose one of the
jobs and share choice with an elbow partner
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8.1
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Give students the All A Loan – Jobs and Salaries
Walk students through the steps on the sheet
Give students mortgage chart
Using the chart on a overhead, demonstrate how to find a 15-year and 30year rate using a $100,000 loan
Allow students time find a 15-year and 30-year rate for a $240,000 loan
Give each student an All A Loan – Mortgage Rate Reality Check
Based on the chart information, students should complete the sheet
Have students share their compare and contrast answers
Give students the Mortgage Agreement and time to complete the agreement
Collect their All A Loan – Mortgage Rate Reality Check and Mortgage
Agreements
Assessment:



All A Loan – Jobs and Salaries
All A Loan – Mortgage Rate Reality Check
All A Loan – Mortgage Agreement, signed
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8.2
All A Loan 3 – Jobs and Salaries
Job Choices and Salaries:
Architect: $68,000
Attorney: $88,000
Engineer: $58,000
Interior Designer: $36,000
Teacher: $48,000
Veterinarian: $50,000
Video Game Designer: $48,000
Step 1: Choose a job. _____________________________
Step 2: Determine how much you gross (get paid) each month. Hint:
divide your total salary by 12. _____________________________
Step 3: Approximately 30% of a person’s salary is deducted for taxes and
other fees each month. Determine how much of your paycheck is
deducted.
Monthly pay: ________________
30% of your monthly pay: _________________
Monthly take home pay: __________________
Example:
Tap Dancer: $12,000
Monthly pay: $1,000
30% of monthly pay: $1,000 x .30 = $300
Take home pay: $1,000 - $300 = $700
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8.3
All A Loan 3 – Jobs and Salaries – Teacher
Key
Job Choices and Salaries:
Architect: $40,000
Interior Designer: $36,000
Teacher: $48,000
Engineer: $54,000
Veterinarian: $50,000
Video Game Designer: $48,000
Salary
Monthly
30%
Take home
Architect: $40,000
$3,333
$1,000
$2,333
Interior Designer: $36,000
$3,000
$900
$2,100
Teacher: $48,000
$4,000
$1,200
$2,800
Engineer: $54,000
$4,500
$1,350
$3,150
Veterinarian: $50,000
$4,167
$1,250
$2,917
Video Game Designer: $48,000
$4,000
$1,200
$2,800
©2010 Beyond Benign, All Rights Reserved
8.4
All A Loan 3 – Mortgage Rate Chart –
30 Year
Loan Amount: $240,000.00
YEAR
Interest Rate: 6.5%
BALANCE
INTEREST
Monthly Payment: $1,516.96
PRINCIPAL
1
$237,317 $15,521
$2,683
2
$234,455 $15,341
$2,862
3
$231,401 $15,150
$3,054
4
$228,143 $14,945
$3,258
5
$224,666 $14,727
$3,477
6
$220,957 $14,494
$3,709
7
$216,999 $14,246
$3,958
8
$212,776 $13,981
$4,223
9
$208,270 $13,698
$4,506
10
$203,462 $13,396
$4,808
11
$198,333 $13,074
$5,130
12
$192,860 $12,731
$5,473
13
$187,020 $12,364
$5,840
14
$180,790 $11,973
$6,231
15
$174,142 $11,556
$6,648
16
$167,048 $11,110
$7,093
17
$159,480 $10,635
$7,568
18
$151,405 $10,129
$8,075
19
$142,789 $9,588
$8,616
20
$133,596 $9,011
$9,193
21
$123,788 $8,395
$9,809
22
$113,322 $7,738
$10,465
23
$102,156 $7,037
$11,166
24
$90,242 $6,289
$11,914
25
$77,530 $5,492
$12,712
26
$63,966 $4,640
$13,563
27
$49,495 $3,732
$14,472
28
$34,054
29
$17,578
30
$0
$2,763
$1,729
$625
$306,109
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$15,441
$16,475
$17,578
$240,000
8.5
All A Loan 3 – Mortgage Rate Chart –
15 Year
Loan Amount: $240,000.00
Interest Rate: 6.5%
YEAR BALANCE INTEREST
Monthly Payment: $2,090.66
PRINCIPAL
1
$230,224 $15,312
$9,776
2
$219,794 $14,658
$10,430
3
$208,665 $13,959
$11,129
4
$196,790 $13,214
$11,874
5
$184,121 $12,418
$12,670
6
$170,603 $11,570
$13,518
7
$156,180 $10,665
$14,423
8
$140,790 $9,699
$15,389
9
$124,370 $8,668
$16,420
10
$106,851 $7,568
$17,520
11
$88,158 $6,395
$18,693
12
$68,213 $5,143
$19,945
13
$46,932
14
$24,226
15
$0
$3,807
$2,382
$21,281
$22,706
$862
$24,226
$136,321
$240,000
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8.6
All A Loan 3 – Mortgage Rate Reality Check
Use the mortgage rate chart to answer the following
questions:
1. If you take out a 15 year mortgage for $240,000, your payments per month will be:
_________________.
2. How much will you have paid at the end of 15 years? (monthly payment x 12
months x 15 years) _______________________________
3. If you take out a 30 year mortgage for $240,000, your payments per month will be:
_________________.
4. How much will you have paid at the end of 30 years?
_______________________________
5. You borrowed $240,000. Once the loan is paid off, how much will you have paid in
interest to the bank?
15-year ______________________
30-year ____________________
Compare and Contrast Your Loan Options:
List 4 ways that a 15-year and 30year mortgage are the same
List 4 ways that a 15-year and 30year mortgage are different
COMPARE
CONTRAST
1.
1.
2.
2.
3.
3.
4.
4.
6. Review your monthly take home salary pay to decide which mortgage you would
choose. I choose a ______-year mortgage for the following reasons:
a.
b.
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8.7
All A Loan 3 – Mortgage Rate Reality
Check – Teacher Key
1. If you take out a 15 year mortgage for $240,000, your payments per month will be:
$2,090.66.
2. How much will you have paid at the end of 15 years? (monthly payment x 12 months x 15
years) $376,200.00 ($373,321.00 according to the mortgage chart)
3. If you take out a 30 year mortgage for $240,000, your payments per month will be:
$1,516.96
4. How much will you have paid at the end of 30 years? $545,745.60 ($546,109 according to
the chart)
5. You borrowed $240,000. Once the loan is paid off, how much will you have paid in interest
to the bank?
15-year: $136,321
30-year: $306,109
List 4 ways that a 15-year and 30-year
mortgage are the same
List 4 ways that a 15-year and 30-year
mortgage are different
COMPARE
CONTRAST
1. same principal
1. monthly payments are a different amount
2. end payment is more than you borrowed
2. 15 year takes less time to pay off
3. monthly payments
3. 15 year is more per month
4. you don’t have the money up-front
4. 15 year costs less in the end
5. hard to own a house without it
5. I choose a __15____-year mortgage for the following reasons:
a. The payments will be finished in 15 years instead of 30
b. I won’t have to pay as much interest
c. I can build equity in the house quickly
6. I choose a __30____-year mortgage for the following reasons:
a. I can afford the monthly payments
b. I pay less to live there
c. I can sell it to pay the loan off early
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8.8
All A Loan 3 – Mortgage Agreement
(insert teacher name)
Mortgage & Loan, Inc. herby loans to
_________________
(your name)
in the amount of $240,000.00 dollars as a construction loan. I am choosing
a _____-year loan. My payments will be __________ per month.
_______________________
_____________
Student signature
Date
.....................................................................................................................
This loan is now repaid in full.
(insert teacher name) Mortgage & Loan, Inc.
____________________________
Authorized signature
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8.9