HOT WHEELS

By: Nicole Shapiro

Salary: $65,000

What I can Afford

Car Payment (monthly): $541.66

3 Year Loan = $18,415.73

4 Year Loan = $24,208.76

5 Year Load = $29,592.57

Yearly / Monthly Payments

Housing 35%: $22,750 / $1,895.83
Taxes 25%: $16,250 / $1,354.16
Transportation (payment) 10%: $6,500 / $541.66
(other) 5%: $3,250 / $270.83
Food 15%: $9,750 / $812.5
Savings 5%: $3,250 / $270.83
Medical 3%: $1,950 / 162.5
Misc. 2%: $1,300 / $108.33

Interest Rate

3.75%

Minimum Payment

The Car I Found Costs $21,165

3 Year Loan Monthly Payment = $621.36

4 Year Loan Monthly Payment = $475.62

5 Year Loan Monthly Payment = $387.42

What I Will Actually Spend

I decided to go with the 4 year loan because it was in my price range and four years seemed like a good amount of time. My first preference would have been the 3 year loan but since it wasn't within my budget I chose the next best option. I will pay a total of $22,829.76 for the car over the course of 4 years.
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Extra Credit

The better option would be the $4000 rebate with 3.75 interest which ends up being $375.54 per month. The 0% interest rate option would cost $408.6 per month.