Project #1700 - Statistics

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?

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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