Roberto and Julie Hernandez are struggling to make their monthly payments. They have accumulated too much...
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Roberto and Julie Hernandez are struggling to make their monthly payments. They have accumulated too much debt, which was easy to do with two young kids at home. Julie works 30 hours a week and takes care of the kids after day care. Their credit history was poor, result- ing in high interest rates on loans. However, a few months ago Roberto added a second job, and they have been making payments regularly for 5 months. 1. Find the monthly payments on each of the following purchases and the total monthly payment. Purchase Honda Accord Ford truck Home 2nd mortgage on home Original Loan Interest Amount Rate $18,800 $14,300 $126,800 $4,500 12% 12% 18% 6,3% Expense Payments on debt from 1. above 2. These monthly expenses do not include car insurance ($215 per month), health insurance ($290 per month), or real estate taxes and insurance on their home ($3350 per year), among other expenses. Find their total monthly outlay for all of these expenses. Term of Loan Car insurance Health insurance Real estate taxes and insurance on home Total Item Honda Accord Ford truck Home 2nd mortgage on home. 4 years 4 years 15 years 3 years Total Car insurance Health insurance Real estate taxes and insurance on home Current Loan Amount 3. A loan officer told them that they can (1) refinance the remaining $14,900 amount on the Honda Accord at 12% over 4 years, (2) refinance the remaining $8600 loan amount on the Ford truck at 12% over 3 years, (3) refinance the remaining $121,850 loan amount on their home at 5% over 30 years, and (4) reduce their car insurance payments by $28 per month. Complete the following table. Monthly Payment Monthly Outlay New Interest Rate New Term of Loan New Monthly Payment 4. Find the reduction in their monthly payments. Part of the savings in the monthly payment came from reducing the interest rates. The remainder of the savings came from extending the loans further into the future, meaning that the Hernandez family will, in the long run, pay more interest. But at least their current bills are reduced by $715.11 per month. Their goal now is to avoid new debt and pay off some of the existing debt. Roberto and Julie Hernandez are struggling to make their monthly payments. They have accumulated too much debt, which was easy to do with two young kids at home. Julie works 30 hours a week and takes care of the kids after day care. Their credit history was poor, result- ing in high interest rates on loans. However, a few months ago Roberto added a second job, and they have been making payments regularly for 5 months. 1. Find the monthly payments on each of the following purchases and the total monthly payment. Purchase Honda Accord Ford truck Home 2nd mortgage on home Original Loan Interest Amount Rate $18,800 $14,300 $126,800 $4,500 12% 12% 18% 6,3% Expense Payments on debt from 1. above 2. These monthly expenses do not include car insurance ($215 per month), health insurance ($290 per month), or real estate taxes and insurance on their home ($3350 per year), among other expenses. Find their total monthly outlay for all of these expenses. Term of Loan Car insurance Health insurance Real estate taxes and insurance on home Total Item Honda Accord Ford truck Home 2nd mortgage on home. 4 years 4 years 15 years 3 years Total Car insurance Health insurance Real estate taxes and insurance on home Current Loan Amount 3. A loan officer told them that they can (1) refinance the remaining $14,900 amount on the Honda Accord at 12% over 4 years, (2) refinance the remaining $8600 loan amount on the Ford truck at 12% over 3 years, (3) refinance the remaining $121,850 loan amount on their home at 5% over 30 years, and (4) reduce their car insurance payments by $28 per month. Complete the following table. Monthly Payment Monthly Outlay New Interest Rate New Term of Loan New Monthly Payment 4. Find the reduction in their monthly payments. Part of the savings in the monthly payment came from reducing the interest rates. The remainder of the savings came from extending the loans further into the future, meaning that the Hernandez family will, in the long run, pay more interest. But at least their current bills are reduced by $715.11 per month. Their goal now is to avoid new debt and pay off some of the existing debt.
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Related Book For
Contemporary Business Mathematics With Canadian Applications
ISBN: 9780135285015
12th Edition
Authors: Ali R. Hassanlou, S. A. Hummelbrunner, Kelly Halliday
Posted Date:
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