Thierry is 43 years old and divorced. He works for a technology company and his net income is $4123 per month. He pays $1250 per month in child support. He owns a two-storey house and his mortgage payments are $835 every two weeks. His house insurance is $47.36 per month. His car lease payment is $245 per month and his car insurance is $113 per month.Thierry owes $8500 on his line of credit, which has a credit limit of $12 000. The only amount due on the line of credit is the interest of approximately $95 per month. Thierry's goal is to pay off the line of credit within two years. Thierry has a golf membership, which costs approximately $6000 per year.

Question 1 Sort Thierry's known expenses into essential and non-essential expenses.

Question 2 Estimate Thierry's other expenses, such as food, gasoline, utilities, and household items.

Question 3 Make a monthly budget for Thierry. Use a spreadsheet or a paper budget template.

Question 4 Make two suggestions for Thierry to improve his financial position.

Six Months Later

Thierry has replaced his home entertainment centre. He used his line of credit to pay the $1700 bill. He now owes $9750 on his line of credit. The minimum monthly payment is now 2% of the balance.He is going to Myrtle Beach, South Carolina, in two months to play golf with his friends. He estimates the vacation will cost approximately $1000.

Question 5 Adjust Thierry's budget for next month to reflect the changes to the payments on his line of credit.

Two Weeks After Vacation

Thierry has received a telephone call from his bank manager. The manager tells him to come in to discuss his finances. Thierry has reached the limit on his $12 000 line of credit.

Question 6 Use a TVM Solver or an on-line calculator to determine the monthly payment on a $12 000 loan with a five-year repayment at 8% interest, compounded monthly.

Question 7 Make a balanced budget for Thierry given the monthly payment from question 6. His income and other expenses have not changed.

Answer rating: 100% (QA)

Question 1 Essential expenses Child support Mortgage payments House insurance Car lease payment Car ... View the full answer