**FQUAN 10050: Taste for Numbers**

**Final Project - The “Cost of Ownership”**

**1. **Obtain your city and state from your TA*. You may not use New York City in this exercise.*

**2. **Research prices for houses in your assigned city and provide a five number summary and a boxplot for these values.

**3. **You have been pre-qualified to get a mortgage. Search for a new home in your assigned city (keep the price within reason for the city). The bank requires a 10% payment and the home can be financed with a 30-year or 15-year fixed rate mortgage. Select a home value that lies within the first quartile of the values for your assigned city.

Use the following formula to answer upcoming questions. Show your work to obtain credit.

**4. **Go to http://www.bankrate.com/calculators/credit-score-fico-calculator.aspxto obtain a credit score estimate, using the following instructions:

a) Select *Get Started*

b) Once complete with the mini-questionnaire, your estimated FICO score range will appear. Use the first score to answer questions regarding your mortgage

**5. **Go to http://www.myfico.com/LoanCenter/Refinance/default.aspx?fire=12to obtain the associated best interest rate for your FICO score range.

**6. **Using your current FICO score range, what is the best interest rate you could get for a mortgage?

Use your interest rate to answer the following questions:

**7. **What is the mortgage payment if you choose a 15-year mortgage?

**8. **What is the total amount of monthly payments if you choose a 15-year mortgage?

**9. **What is the total interest paid if you choose a 15-year mortgage?

**10. **What is the mortgage payment if you choose a 30-year mortgage?

**11. **What is the total amount of monthly payments if you choose a 30-year mortgage?

**12. **What is the total interest paid if you choose a 30-year mortgage?

**13. **Which option gives you the lowest mortgage payment?

**14. **Which option gives you the lowest finance charge?

**15. **How much interest is saved if you choose the 15-year mortgage instead of 30-year mortgage?

**16. **Go to http://www.myfico.com/LoanCenter/Refinance/default.aspx?fire=12to obtain the associated best interest rate for your FICO score range. *Example*:

**17. **Imagine you had a sudden boost to your credit and your score increased by 80 points. What is the best new interest rate that you could get for your mortgage?

**18. **What would your mortgage payment be for a 15-year mortgage?

**19. **What is the total interest that you would pay based on this new rate?

**20. **Go to http://www.myfico.com/LoanCenter/Refinance/default.aspx?fire=12to obtain the associated best interest rate for your FICO score range.

**21. ** Imagine you had a sudden decline to your credit and your score decreased by 80 points. What is the best new interest rate that you could get for your mortgage?

**22. **What would your mortgage payment be for a 15-year mortgage?

**23. **What is the total interest that you would pay based on this new rate?

**24. **Review your answers. Based on the comparison made, explain the impact that you think credit scores have on a consumer.

Supplement your text with visual information (tables, graphs, images, etc)

Subject | Science |

Due By (Pacific Time) | 12/18/2012 |

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