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Ethan Eldred

Professor Nelson

Math1030

07/10/23

Reflective Writing for Mortgage Project

This assignment was designed around exploring the different ways a mortgage can roll

out and how it impacts our wallets. The assignment highlights the benefits and differences in

loan length in years, additional payments being made to different rate over different numbers of

years. The equation mostly used was the loan formula, which requires us to know the r (which is

the annual rate), k (which stands for the amount of times the amount is beings compounded

annually), P0 (the starting loan amount) and d (the monthly payment). When working with r, we

must make sure that the percentage that is given for the annual percentage, such as 4.6%, is

translated to decimal format, ending up as r = .046.

I do think these kinds of problems make math much more applicable to the real world.

These results show things that are hard to understand to human minds, we aren’t good at looking

ten, or even five, years in the future. These kinds of assignments not only help build awareness

around the reality of how the housing market works, but also the ways in which interest rates can

impact rash decisions when it comes to loans.

One application of this type of analysis could be realty property. Realtors would need to

use this information to know how much to charge tenets to break even and make money on-top

of the monthly payment. In conjunction, the final part about making additional payments would

play into this conversation as well. If the realtor wanted to pay off the house sooner, they could
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use the final equation to know when that could happen and chart out a specific pathway to

having the rental property paid off sooner.

When it comes to interest rates, most people would only think one and done or that the

interest wouldn’t be that much. But, this assignment showed the interest rates and the ways they

impact people. The section regarding wages would be most important for a mortgage broker,

they’d, hopefully, set up the consumer with a livable mortgage that falls within a livable wage

for the purchaser. If they didn’t, oh boy, that would spell disaster for the purchaser and

potentially the bank.

Comparing the two different lengths of times provided in the signature assignment, the

first pros and cons that is glaringly obvious was the monthly payments. If someone really wanted

to get the loan over with sooner, the payments are going to be higher but if it can’t be afforded

then the longer and lower payment loan would be the option. This could also be used by people

who want to purchase a house outside of what they would think they could afford because the

payments are lower, just more over time. However, that isn’t the best financial advice as it does

result in paying the bank more money. Whereas the increase in payments means you could

potentially own the house sooner.

This assignment hasn’t fully changed the ideas I have on math, they’ve changed them to a

degree. I found this section to be insightful into the ways we underestimate math, and

percentages. What I found here, was the awareness of how the percentages of money affect me

every day on my cards and loans. To how it affects my savings and investments—especially the

compounding stocks that I have from my work. This section helped me understand and

appreciate the worth in knowing how the economy in the US works, and some solace on

purchasing a house. Lastly, in looking into my career, being a teacher, I knew that my salary
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wasn’t going to be huge. Falling in a category of $45,000 - $65,00+, depending on the teaching it

can go up from there. However, wanting to focus on changing high school curriculum, the wages

there are usually around $45,000 - $60,000 within the valley. This assignment changed neither of

my views, I have a very negative outlook on the housing market as rent has becoming

increasingly expensive and math doesn’t always reflect reality. Things are more complicated

than just numbers, much like choosing a major.