Questions: 1. You are buying a home for 400,000 with a 10% down payment. The annual interest rate is 6% and the mortgage term is 20 years calculate the monthly mortgage payment Questions 2: create a monthly budget that Includes the mortgage payment, property taxes ( 4,800 annually ), utilities and other personal expenses Ensure that the total expenses do not go over 3,500 per month

**Question 1: Calculating the Monthly Mortgage Payment**<br /><br />1. **Calculate the Loan Amount:**<br /> Down payment = 10% of $400,000 = $40,000<br /> Loan amount = $400,000 - $40,000 = $360,000<br /><br />2. **Convert Annual Interest Rate to Monthly:**<br /> Monthly interest rate = 6% / 12 = 0.06 / 12 = 0.005<br /><br />3. **Calculate the Number of Payments:**<br /> Number of payments = 20 years * 12 months/year = 240<br /><br />4. **Use the Mortgage Payment Formula:**<br /> M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]<br /><br /> Where:<br /> * M = Monthly mortgage payment<br /> * P = Loan amount ($360,000)<br /> * i = Monthly interest rate (0.005)<br /> * n = Number of payments (240)<br /><br /> M = $360,000 [ 0.005 (1 + 0.005)^240 ] / [ (1 + 0.005)^240 – 1]<br /> M = $360,000 [ 0.005 (3.3102) ] / [ 3.3102 – 1 ]<br /> M = $360,000 [ 0.016551 ] / [ 2.3102 ]<br /> M ≈ $2,569.78<br /><br />Therefore, the monthly mortgage payment is approximately **$2,569.78**.<br /><br /><br />**Question 2: Creating a Monthly Budget**<br /><br />Here's a sample monthly budget that includes the calculated mortgage payment and stays within the $3,500 limit:<br /><br />| Expense Category | Monthly Amount |<br />|--------------------------|----------------|<br />| Mortgage Payment | $2,569.78 |<br />| Property Taxes | $400.00 | ($4,800 / 12)<br />| Utilities (Electricity, Water, Gas) | $300.00 |<br />| Groceries | $400.00 |<br />| Transportation (Car payment, gas, public transport) | $200.00 |<br />| Personal Care/Entertainment | $30.22 |<br />| **Total Expenses** | **$3,500.00** |<br /><br /><br />**Explanation and Adjustments:**<br /><br />* **Property Taxes:** The annual amount is divided by 12 to get the monthly cost.<br />* **Utilities:** This is an estimated amount and can be adjusted based on individual usage.<br />* **Groceries:** This can be adjusted based on individual needs and dietary habits.<br />* **Transportation:** This includes car payments, gas, public transportation, or other transportation costs.<br />* **Personal Care/Entertainment:** This includes expenses for personal care items, entertainment, dining out, and other miscellaneous expenses. This category has been minimized to fit within the budget.<br /><br />This budget is a starting point. You can adjust the amounts in each category based on your specific needs and priorities. It's important to track your spending and make adjustments as needed to ensure you stay within your budget.<br />