CASE STUDY # 4: consolidating Loans Show all your work for full credit; explanations must be in paragraph form. Answers must be rounded to the nearest hundredth. Robert & Julie Brown 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, resulting in high interest rates on loans. However, a few months ago, Robert 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 Original Loan Interest Term of Monthly Amount Payment Rate Loan Honda Accord $18,800 1296 4 yrs. Ford truck $14,300 1896 4 yrs. Home $126,000 6.5% 15 yrs. Equity Loan $4,500 12% 3 yes Total Source Fictitious data, for illustration purposes only 2. These monthly expenses do not include car insurance ($215/month), health insurance ($290/month), or real estate taxes & insurance on their home ($3,350/year), among other expenses. Find their total monthly outlay for all these expenses Monthly 2. These monthly expenses do not include car insurance ($215/month), health insurance ($290/month), or real estate taxes & insurance on their home ($3,350/year), among other expenses. Find their total monthly outlay for all these expenses. Expense Monthly Outlay Total from above Car Insurance Health Insurance Real Estate & Home Owners Insurance Total Source: Fictitious data, for illustration purposes only 3. A loan officer told them that they can (1) refinance the remaining $14, 900 amount on the Honda Accord at 12% over 4 yrs, (2) refinance the remaining $8600 loan amount on the Ford truck at 12% over 3 yrs. $121,850 loan amount on their home at 5% over 30 yrs., and reduce their car insurance payments by $28 per month. Complete the following table: ITEM Current Loan Amount New Interest Rate New Term Of Loan New Monthly Payment Honda Accord $14,900 12% 4 yrs. Ford Truck $8,600 1296 3 yrs. Home $121,850 5 30 yrs. Home Equity $4,500 1296 3 yrs, Car insurance Health Insurance Tatal Source Fictitious data, for illustration purposes only pdf 2 / 2 Car Insurance Health Insurance Total Source: Fictitious data, for illustration purposes only 4. Find the reduction in their monthly payments