I need someone to go over this and check it and then complete what I have not done. Please!!
Part 1:
You wish to purchase a car, your options are below. Please pick the vehicle that will fit the Needs of your family: (Circle your choice)
Ford Explorer $ 35,000
Kia Soul $ 20,000
Toyota Corolla $ 25,000
Subaru Outback $ 27,000
Now go to State Employees Credit Union website, or www.ncsecu.org , then looking at the top right hand side of the page click on Lending Rates.
Scroll down until you find the Vehicle Loans. You need to pick which kind of New Car Loan you want to go with, write your choice here: (You must use the Direct Pay option for either a 3 year loan, or a 5 year loan.)
fixed-rate financing 37-60 Months _______________________________________
Your option includes which interest rate? ____4.25%_________
Use your notes, and figure what your monthly payment for the car is: _____648.53_________________
PMT= ($35000(.0425))
12__
(1-(1+(.0425))(-12*60-12) ) = $648.53
12
Part 2:
Next, we are going to have to purchase a house: There are two houses you like, both have the same number of bedrooms, and bathrooms. One is closer to your job, and the other has a larger yard. Your bank will give you a 3.5% fixed interest rate on a 20 year loan, or a 3.25% fixed interest rate on a 30 year loan. Either way you will need to pay a down payment of 10% of the cost of the house before you finance. Fill in the chart below:
Close to job: $135,000 house, closing cost is $1500 + 2 points.
Larger yard: $ 145,000 house, closing cost is $1000 + 3 points.
| Down Payment | Monthly Payment | Total Loan Payout | Total Interest Paid | Closing Cost | Amount Paid Upfront | Total Paid for house | |
| Close to job, for 20 years | 13,500 | 704.65 | 169, 116 | 47,616 | 3,930 | 17,430 | 186,546 |
| Close to job for 30 years | 13,500 | 528.78 | 190,360.80 | 68,860.80 | 3,930 | 17,430 | 207,790.80 |
| Larger yard for 20 years | |||||||
| Larger job for 30 years |
Which house would you choose, and which payment plan would you pick for that house? Why do you choose that one, give the pros and cons for your decision.
(Type your answer here)
Part 3:
Currently you are making $2750 after taxes every month, and your monthly bills look like the following:
Rent $750/month
Food $250/month
Utilities including cable phone and electricity $400/month
Entertainment, Gas, and incidentals $350/month
Which has allowed you to save $1000 a month in the past. (Thank goodness, you are debt free currently)
You need the new car, and you want to get in a house, considering you have a savings account with a total of $20,000 in it, it is doable. What are the decisions you would make? Include in your answer your car choice, and monthly payment for the car. Also let me know which house you decide on and which payment option. Justify your answers by giving the pros and cons of these options you have decided on, and make out a new monthly budget that will fit in all the new purchases and bills. (Should you find out that your choice isn’t currently “doable”, what are the suggestions you would make to be sure that they were doable?)
(Type your answer here)
