# Real Life Math

### Buying a Car

## Life Expenses

Total Earnings Per Year: $40,000

Occupation: Social Worker

Cost Of Living

Housing- 35%

Per Year- $14,000

Per Month- $1,166.67

Taxes- 25%

Per Year-$10,000

Per Month- $833.33

Transportation- 10%

Per Year- $4,000

Per Month- $333.33

Gas-5%

Per Year- $2,000

Per Month- $166.67

Food- 15%

Per Year- $6,000

Per Month- $500

Savings- 5%

Per Year- $2,000

Per Month- $166.67

Medical- 3%

Per Year- $1,200

Per Month- $100

Miscellaneous- 2%

Per Year- $800

Per Month- $66.67

## This Car is a 2013 Ford Escape 2WD S

This used Ford Escape is $14,710. The Ford Escape has only 38,108 miles on it and averages about 26 miles per gallon. This car is the perfect size and will last a while since it is not very old and there are not very many miles on it. This car is equipped with many safety features and has a GPS built in. This car is suitable for the future because it i has five seats and is perfect for a family.

## Present Value Of What I Can Afford With the salary I make and what I can pay a month this is what I can afford to pay for a car on a loan. With a three year loan I can afford a car that is $11,332.78, with a four year loan I can afford a car that is $14,836.19, or with a five year loan I can have a car that is $18,210.85. | ## Monthly Payment for the $14, 710 Car For each of the three, four, and five year loans this is the amount of money to be paid each month until the car is payed off. With the three year loan the monthly payment would be $432.66, a four year loan is 330.49, and a five year loan is $269.25. The three year loan is no longer an option due to the fact that the monthly payment is out of my budget range. | ## Total Money Spent on the Car This is the total money spent with the four and five year loans. The total cost of the car over four years would be $15,863.52 where as the five year loan will cost $16,155. The four year loan is a better budget plan for my salary because I will own the car sooner and will only have to pay a little over one thousand dollars more for my car. |

## Present Value Of What I Can Afford

With the salary I make and what I can pay a month this is what I can afford to pay for a car on a loan. With a three year loan I can afford a car that is $11,332.78, with a four year loan I can afford a car that is $14,836.19, or with a five year loan I can have a car that is $18,210.85.

## Monthly Payment for the $14, 710 Car

For each of the three, four, and five year loans this is the amount of money to be paid each month until the car is payed off. With the three year loan the monthly payment would be $432.66, a four year loan is 330.49, and a five year loan is $269.25. The three year loan is no longer an option due to the fact that the monthly payment is out of my budget range.

## Total Money Spent on the Car

This is the total money spent with the four and five year loans. The total cost of the car over four years would be $15,863.52 where as the five year loan will cost $16,155. The four year loan is a better budget plan for my salary because I will own the car sooner and will only have to pay a little over one thousand dollars more for my car.