2013 Jeep Grand Cherokee


2013 Jeep Grand Cherokee Laredo 4D Sport Utility

Salary: 120,000

Yearly/Monthly Budget:

Taxes: $30,000/ $2500

Housing: $42,000/ $3500

Food: $18,000/ $1500

Savings: $6,000/ $500

Transportation Payment: $12,000/ $1000

Other: $6,000/ $500

Medical: $3,600/ $300

Miscellaneous: $2,400/$200

Below I used the Present Value formula to calculate what I could afford and find the best deal for my budget.

Car Payment

Yearly: $12,000

Monthly: $1,000

Using the total amount of what I can afford I calculated:

3 Year Loan- PV= $33,998.68

4 Year Loan- PV= $44,509.02

5 Year Loan- PV= $54,633.11

The car I chose costs $26,998 and I calculated what I could afford for my monthly payments.

3 Year Loan- $823.51

4 Year Loan- $629.02

5 Year Loan- $512.50

Overall Payment

I chose the 3 year loan because it fits best with my budget, therefore I will pay $29,646.36 over the course of the loan.

(823.51)(12.3)= $29,646.36

Deal Made

The car I chose was a 2013 Jeep Grand Cherokee that costs $26,998. I have a salary of 120,000, which is pretty big, I still decided to spend a decent amount on the car because I still have other expenses to take car of. I chose the 3 year plan with a monthly payment of $823.51, because it fit best with my budget. I used CarMax to find my car and I was able to find the car I want and like with a great deal.

Extra Credit

3.75% Interest Rate- 22,533.04

0%- 24,515.00

If Mrs. O'Connell did not pay the interest, she would not be getting a good deal. By paying the 3.75% interest, she would be saving $33.06 every monthly payment. Even though it would take more time paying it off, it is the better paying option. Overall Mrs. O'Connell will be paying $22,533.04 for her car with interest.

Avery Shields