Finance Project

Scenario 1 Shaw

Scenario 1 Description

Brent is a construction foreman who did not attend college. He is 24 years old and earns an annual salary of $50,000. He just purchased a $23,000 car with a 6.50% 5 year car loan. He wants to buy his first home in the next few months.

2016 Mazda 6 iSport

Brent purchased this car through car.com at $22,995 he will pay this car off over 5 years at a 6.5% interest rate, and will make cars payments monthly.


A= 22,995(1 + .065/12)^12*5


He will end up paying $31,797.89 over those 5 years.

1033 S Valley Rd Olathe, KS

Brent decided to buy a house in Olathe, KS. He approached a representative from Sebonic Financial to get a loan and with his credit score of 683 he was approved for an interest rate of 4.221%. He has decided to make payments of $732.29 per month to pay for the house. And he got an initial downpayment of $20,000 from his parents who were saving it for his college fund.

Increase in monthly payment

If Brent were to increase his monthly payment by 15% he would now be paying $842.13 per month. If he were to choose this he would only have to make 279 payments and he would save $28,669.15, and would pay it off 6 years and 9 months faster.


(732.29*360)-(842.13*279)=S

Budget

$53,000/12= $4,413.66 per month


Utilities- $1,000

Phone- $75

Food- $400

Entertainment- $350

House Payments- $732.29

Car Payments- $529.96

Retirement Fund- $441.37

College Fund for kids- $882.73


First Year Payment Projections

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Citations

2016 Mazda Mazda6 i Sport. (n.d.). Retrieved February 15, 2016, from http://www.cars.com/vehicledetail/detail/644909456/overview/

David Brent. (n.d.). Retrieved February 15, 2016, from https://en.wikipedia.org/wiki/David_Brent

Dollar sign free clip art Free vector We have about (14) Free vector ai, eps, cdr, svg format in (1/1) pages. (n.d.). Retrieved February 15, 2016, from http://all-free-download.com/free-vector/dollar-sign-free-clip-art.html

Olathe Home For Sale. (n.d.). Retrieved February 15, 2016, from http://www.zillow.com/homedetails/1033-S-Valley-Rd-Olathe-KS-66061/2101161585_zpid/

Olathe KS Mortgage Rates - Find the Best Home Loan | Zillow. (n.d.). Retrieved February 15, 2016, from https://www.zillow.com/mortgage-rates/ks/olathe/#purpose=Purchase