Reference no: EM132168869
Your Future after College in a Glance
For most college students once they graduate college and get that first pay-check, they go crazy spending money left and right. Well let's say that for once, we want to do things "by the book."
After you graduate you decide to do the following: buy a house, get a new car (whether new or used), start contributing $400 a month to a money market savings account, and begin paying back your college loan.
What I would like for you to do is to search online for a house and a car that you would like to own. In addition to these items, also look for a job that you would eventually like to have that hopefully pertains to your major. Remember that you are majoring in some form of business.
You will be making presentations and submitting documents in many of your classes and in your jobs. Please turn in a professional looking document for this project. After all of this what you will be turning in to me, are the following:
HOUSE
1. Print off and attach the full-page details of the house that you picked out.
2. What city are you looking to live in?
3. You plan to pay 20% of the price of your home as a down payment and finance the rest of the cost.
a. How much is your down payment?
b. How much will you finance?
4. Now assuming that a bank offers you a 30-year loan at 4.9% compounded monthly to pay the balance of your loan,
a. What monthly payments would you have in order to own the house after 30 years? (Show what you put into your calculator)
b. What is the total amount you would pay over the 30 years?
c. How much total interest would you pay?
5. After paying on the loan for 10 years, you decide to refinance. How much do you still owe after 10 years? (Show what you input into your calculator)
6. After refinancing, what will be your new monthly payments if you have a new 20-year mortgage at 3.6% compounded monthly? (Show what you input into your calculator)
7. If you had decide to finance for 15 years from the beginning, at the same interest rate with the same down payment,
a. What will your payments be? (Show what you input into your calculator)
b. What is the difference in the amount of monthly payment for a 30 year mortgage compared to a 15 year?
c. What is the total amount you would pay over the 15 years?
d. How much total interest would you pay?
CAR
8. Print off and attach the full-page details of the car that you picked out (used or new).
9. If the vehicle you picked is used, we will assume that the dealership offers you 3-year loan at 4.9% compounded monthly,
a. What payments would you have to make to own the car after 3 years? (Show what you put into your calculator)
b. What is the total amount you pay for the vehicle?
10. If the vehicle you picked is new, we will assume that the dealership offers you a 5 year loan at 3.9% compounded monthly,
a. What payments would you have to make to own the car after 3 years? (Show what you put into your calculator)
b. What is the total amount you pay for the vehicle?
11. The average vehicle depreciates 15% in value each year. What is your vehicle worth 5 years after you buy it?
OTHER EXPENSES
12. Since you are already trying to set aside $400 every month for retirement, how much money will you have in 20 years if you found a savings annuity that will offer 3.1% compounded monthly? (Show what you put into your calculator)
13. After 20 years of paying $400 a month, you decided to roll-over the amount into a new retirement account. You will pay $1000 a month into this new account which pays 7% interest compounded monthly.
a. How much do you "roll" into the new account?
b. How much in total will you have after another 20 years? (Show what you put into your calculator)
14. Also, after graduating WT, you find that you have an outstanding loan of $25,000 to pay back to the school @6.8% interest compounded monthly.
a. If your loan has to be paid back in 10 years,
i. What will your monthly payments be? (Show what you put into your calculator)
ii. What is the total amount you will pay back if you do not make any extra payments?
b. Since you are ready to get rid of your debt as soon as possible, you decide to pay it off in 7 years.
i. What payments will you need to make? (Show what you put into your calculator)
ii. What is the total amount you will pay back?
15. After graduation, you also have a $5000 credit card balance. You decide to stop making purchases on the card and start paying $200 a month to get it paid off. How long will it take you to pay off the card if it has a 15% interest rate compounded monthly? (Show what you put into your calculator)
JOB
16. Search online for a job that you would like to have right after college. Make sure it is in the city you plan on living in. Find the starting salary or the median salary for the job. Print off and attach the full-page details for your job. Be sure to pick a job you will actually be qualified for! (You can't take a job as a CEO or the president of a university with no experience)
17. Looking at the first 10 years after college, what are your monthly expenses? What are your yearly expenses? Sum together the results from #4, 8, & 11 along with your $400 for retirement, $200 credit card balance, and $1500 each month for general expenses (utilities, cell phone, food, gas, insurance, etc).
18. Use the following chart to estimate the tax bracket for your chosen job. Then use the appropriate percentages to figure out your actual take-home-pay after taxes.
|
Rate
|
Individuals
|
Married Filing Jointly
|
|
10%
|
Up to $9,525
|
Up to $19,050
|
|
12%
|
$9,526 to $38,700
|
$19,051 to $77,400
|
|
22%
|
38,701 to $82,500
|
$77,401 to $165,000
|
|
24%
|
$82,501 to $157,500
|
$165,001 to $315,000
|
|
32%
|
$157,501 to $200,000
|
$315,001 to $400,000
|
|
35%
|
$200,001 to $500,000
|
$400,001 to $600,000
|
|
37%
|
over $500,000
|
over $600,000
|
19. Will the take-home salary of your chosen job support your expenses right out of college? Do you need to decrease your monthly expenditures or are you well within your budget?
20. The goal of this project is for you to "see" into the future and to hopefully prevent enormous amounts of debt right out of college. Remember that this is just a brief overview of a few expenditures - there are still vacations, family, insurance needs, significant others...that are not included here. Can you think of anything else that you would like to add?