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Manuel’s income and expenses assignment Help
Manuel’s income and expenses assignment Help
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Use the learnings in class on Topic 5- to support your responses. Do some necessary research to analyze your chosen question in each case.
Directions:
This assignment assesses some of the skills you learned in Topic 5 – Managing Myself – Financial Literacy. There are three different assignments in this package:
Part A- COMPULSORY- 10 Marks.
Shopping for a car loan: pretend you are buying a car. Select a car and find out what it costs. Imagine that you will take a loan for 90% of the car cost.
Your task is to shop around for the best car loan terms. Try several different banks- at least 3.
When you have finished, look at your chart.
Which loan would you take?
What features make it more appealing than the others?
Which institutions offered the best rates, and why do you think they did so?
Pretend that you have decided to purchase a new car. Select the model you would choose. Complete page 2.
Part B- CHOOSE ONE
Case Study: Manuel. Complete pages
Case Study: Rose. Complete pages
You must choose 1 assignment from here- 10 Marks.
In total, you will have to complete 2 assignments (Part A and one from Part B).
Part A- Question Car Loan
Shopping for a car loan
Amount of Loan AED(a) By student
Financial institution Bank 1 Bank 2 Bank 3 Bank 4 Bank 5 APR (b) Bank Length of loan(c) By student Monthly payment (d) Bank Total finance charge (e) (f) – (a) Total to be repaid (f) (d) *(c) duration in months
SHOW ANY WORKING/ CALCULATION YOU WOULD LIKE TO – ON A NEW PAGE BELOW
Part B- CASE 1 Manuel
how much would you spend?
Scenario 1
Manuel wants to buy a car. But before he goes shopping, he wants to know exactly how much he can afford to spend each month on owning, operating, and maintaining a car.
Manuel’s net monthly income is AED1,280. His fixed expenses are:
AED350 for rent
His flexible monthly expenses are:
AED75 for savings
AED25 for utilities
AED185 for food
AED35 for transportation (bus fare)
AED150 for tuition and books
AED40 for entertainment
AED20 for personal items
AED29 for household items
If Manuel gets a car, he expects to spend about AED40 a month on gas and oil, and about AED20 on parking and bridge tolls.
Manuel needs to have car insurance. He has shopped around and expects that a car insurance premium for the type and year of car he wants will cost about AED225 a month.
Directions
Use the attached budget sheet and auto loan payment calculator (practicalmoneyskills.com/c2) to complete the following chart and answer the following questions.
car for AED6,000 (Amount of loan: AED6,000)
APR: 4% APR: 5%
Length of Loan: 60 months Length of Loan: 60 months
Total Cost of Loan: Total Cost of Loan:
Monthly Payment: Monthly Payment:
Total Finance Charge: Total Finance Charge:
APR: 6% APR: 7%
Length of Loan: 60 months Length of Loan: 60 months
Total Cost of Loan: Total Cost of Loan:
Monthly Payment: Monthly Payment:
Total Finance Charge: Total Finance Charge:
car for AED8,000 (Amount of loan: AED8,000)
APR: 4% APR: 5%
Length of Loan: 60 months Length of Loan: 60 months
Total Cost of Loan: Total Cost of Loan:
Monthly Payment: Monthly Payment:
Total Finance Charge: Total Finance Charge:
APR: 6% APR: 7%
Length of Loan: 60 months Length of Loan: 60 months
Total Cost of Loan: Total Cost of Loan:
Monthly Payment: Monthly Payment:
Total Finance Charge: Total Finance Charge:
car for AED10,000 (Amount of loan: AED10,000)
APR: 4% APR: 5%
Length of Loan: 60 months Length of Loan: 60 months
Total Cost of Loan: Total Cost of Loan:
Monthly Payment: Monthly Payment:
Total Finance Charge: Total Finance Charge:
APR: 6% APR: 7%
Length of Loan: 60 months Length of Loan: 60 months
Total Cost of Loan: Total Cost of Loan:
Monthly Payment: Monthly Payment:
Total Finance Charge: Total Finance Charge:
Which car can Manuel afford?
What are the terms of the loan that would allow Manuel to buy a car and still stay within his budget?
Using the column “How You’d Do It” on Manuel’s budget worksheet, figure how you would set up a budget if you had Manuel’s income and expenses.
What were the main differences between the budget you set up using Manuel’s income and expenses and the budget that was provided?
Manuel’s budget
income Manuel scenario how you’d do it Difference Job #1 AED AED AED Job #2 AED AED AED Other AED AED AED Total Income AED AED AED
fixed expenses
Rent AED AED AED Car insurance AED AED AED Installment payments Car loan payment Credit card 1 Credit card 2
AED AED
AED
AED AED
AED
AED AED
AED
Total installment debt AED AED AED Percentage of net income % % %
flexible expenses
Savings AED AED AED Utilities AED AED AED Food AED AED AED Transportation AED AED AED Bus fare AED AED AED Gas and oil AED AED AED Parking and tolls AED AED AED Repairs AED AED AED Tuition AED AED AED School expenses AED AED AED Clothing AED AED AED Entertainment AED AED AED Household items AED AED AED Personal items (toothpaste, etc.) AED AED AED Total Monthly Expenses AED AED AED Total income – total expenses AED AED AED
Part B- Case 2
how much would you spend? (continued)
Scenario 2
Rose is thinking about buying a car. She has AED1,000 saved for a down payment. Before she goes shopping, she wants to know how much she can afford to spend each month on a car.
Rose brings home AED926 each month from her first job, and AED974 from her second job. Her fixed expenses include:
AED250 for rent
AED34 for a credit payment on some furniture she bought several months ago that has a total outstanding balance of AED540
Her flexible monthly expenses are:
AED100 for savings
AED20 for telephone
AED175 for food
AED45 for transportation (bus fare)
AED70 for tuition
AED20 for school supplies
AED40 for clothing
AED40 for entertainment
AED20 for household supplies
AED29 for personal items
If Rose gets a car, she expects to spend about AED60 a month on gas and oil, and about AED30 on parking and bridge tolls.
If Rose gets a car, she will need car insurance. She has done some research, and she expects her car insurance premium to be about AED175 a month.
Directions
Use the attached budget sheet and auto loan payment calculator (practicalmoneyskills.com/c2) to complete the following chart and answer the following questions.
how much would you spend? (continued)
car for AED4,000 (Amount of loan: AED3,000)
APR: 4% APR: 5%
Length of Loan: 36 months Length of Loan: 36 months
Total Cost of Loan: Total Cost of Loan:
Monthly Payment: Monthly Payment:
Total Finance Charge: Total Finance Charge:
APR: 6% APR: 7%
Length of Loan: 36 months Length of Loan: 36 months
Total Cost of Loan: Total Cost of Loan:
Monthly Payment: Monthly Payment:
Total Finance Charge: Total Finance Charge:
car for AED6,000 (Amount of loan: AED5,000)
APR: 4% APR: 5%
Length of Loan: 36 months Length of Loan: 36 months
Total Cost of Loan: Total Cost of Loan:
Monthly Payment: Monthly Payment:
Total Finance Charge: Total Finance Charge:
APR: 6% APR: 7%
Length of Loan: 36 months Length of Loan: 36 months
Total Cost of Loan: Total Cost of Loan:
Monthly Payment: Monthly Payment:
Total Finance Charge: Total Finance Charge:
name: date:
how much would you spend? (continued)
car for AED8,000 (Amount of loan: AED7,000)
APR: 4% APR: 5%
Length of Loan: 36 months Length of Loan: 36 months
Total Cost of Loan: Total Cost of Loan:
Monthly Payment: Monthly Payment:
Total Finance Charge: Total Finance Charge:
APR: 6% APR: 7%
Length of Loan: 36 months Length of Loan: 36 months
Total Cost of Loan: Total Cost of Loan:
Monthly Payment: Monthly Payment:
Total Finance Charge: Total Finance Charge:
Which car can Rose afford?
Using the column “How You’d Do It” on Rose’s budget worksheet, figure how you would set up a budget if you had Rose’s income and expenses.
What were the main differences between the budget you set up using Rose’s income and expenses, and the budget that was provided?
how much would you spend? (continued)
Rose’s budget
income scenario how you’d do it difference Job #1 AED AED AED Job #2 AED AED AED Other AED AED AED Total Income AED AED AED
fixed expenses
Rent AED AED AED Car insurance AED AED AED Installment payments Car loan payment Credit card 1 Credit card 2
AED AED
AED
AED AED
AED
AED AED
AED
Total installment debt AED AED AED Percentage of net income % % %
flexible expenses
Savings AED AED AED Utilities AED AED AED Food AED AED AED Transportation AED AED AED Bus fare AED AED AED Gas and oil AED AED AED Parking and tolls AED AED AED Repairs AED AED AED Tuition AED AED AED School expenses AED AED AED Clothing AED AED AED Entertainment AED AED AED Household items AED AED AED Personal items (toothpaste, etc.) AED AED AED Total Monthly Expenses AED AED AED Total income – total expenses AED AED AED
