Reference no: EM133043419

Question - Sara is 37 and has been working two years as a supervisor for facilities maintenance for the provincial government earning a salary of $65,000, which leaves her with take home pay of $3,600 per month. She has a good benefits plan which includes a government pension: 1.5% per year of service times the average of her best five year's salary. Other benefits include life insurance (2 x annual salary), disability insurance of $2,500 a month after tax, medical, dental, glasses etc.

The following are her debts, assets and monthly expenses:

She already has $8,000 RRSP saved up and continues to save $140 a month.

A car worth $36,000, with a loan at 8% compounded annually, monthly payments of $610 for 57 more months.

A TFSA with $23,000 saved, to which she contributes $200 a month continuously.

A student loan at 5% per annum, payments of $322 with 12 months to go.

Rent of $1,000 a month for her share of a two bedroom apartment which she shares with a friend.

The rest of her income goes to living expenses. Sara would like to pay off her car loan in four years since it has a higher interest rate. She foresees herself retiring comfortably at 63. Sara and Sam, her boyfriend, are wondering if they can afford to buy a place and move in together. They have their eyes on a one bedroom condo which is listed for $280,000.

Sam earns $21,000 a year, which gives him $1,600 after tax monthly. He works part time while finishing his plumbing license. He pays $500 a month in rent for a place he shares with friends. He has no employee benefits and has a $8,100 credit card debt at 20% interest compounded monthly, which he is paying $400 a month. The rest of his monthly income goes towards his living expenses.

Required - Calculate how much Sara owes on her car loan rounded to the nearest dollar.