MAP 4C Lesson 2.6 Case Study # 2 Rick, the bricklayer Rick has been a bricklayer for a few years now. He earns $14.50/hr (after all deductions) He is paid every Thursday. He has been renting an apartment and wants to buy a condominium for $85 000. He has been saving for a $5000 down payment Rick has been visiting some mortgage institutions and has decided to get a 5-year term rate. He will amortize his condominium over 25 years, He does a little research and determines the best current 5-year rate is 5,9%/year. Use the TI-83 to determine his monthly mortgage payment He shares this information with us: so7. 10/month Food: weekly groceries $110/week Transportation: Rick does not own a car. He takes public transportation everywhere (he also has a bike). He figures his monthly costs are about $60 Utilities: After doing his research, gas = $85/mth, hydro = $50/mth, cable = $35/mth Condo fees: are $ 1450/yr Entertainment and recreation: $150/month Clothing: $50/wk Charity: $35/wk Personal medical and dental: $130/mth Insurance life and condo): $185/mth Savings: He'd like to save $200 every month. Miscellaneous: $200 to cover any unexpected expenses 1. Calculate Rick's monthly net income. 2. Prepare Rick's monthly budget. Also calculate the percent that each item represents of his total budget. Percent Item Monthly budget Income Total Income Mortgage Condo fees Insurance Transportation Utilities Entertainment and recreation Clothing Personal, Medical and dental Food Charity Savings Miscellaneous Total Expenses Total Income - Total Expenses Does his budget work with his income (ie does he make enough money?)? He forgot that he needed to buy a fridge and stove. This will cost him $1800. He decides to get a 2-year bank loan for this amount and this will cost him $82 every month Does he need to adjust his budget? Explain Rick is getting married in 2 years and has been asking his boss for some extra hours. His boss was happy to hear this and gave Rick 8 hours of OT (time and a half) per week during the busy season (30 weeks/year in total). Rick needs to save $12 000 above what he normally saves. Can he do it? Explain. What options does he have? MAP 4C Lesson 2.6 Case Study # 2 Rick, the bricklayer Rick has been a bricklayer for a few years now. He earns $14.50/hr (after all deductions) He is paid every Thursday. He has been renting an apartment and wants to buy a condominium for $85 000. He has been saving for a $5000 down payment Rick has been visiting some mortgage institutions and has decided to get a 5-year term rate. He will amortize his condominium over 25 years, He does a little research and determines the best current 5-year rate is 5,9%/year. Use the TI-83 to determine his monthly mortgage payment He shares this information with us: so7. 10/month Food: weekly groceries $110/week Transportation: Rick does not own a car. He takes public transportation everywhere (he also has a bike). He figures his monthly costs are about $60 Utilities: After doing his research, gas = $85/mth, hydro = $50/mth, cable = $35/mth Condo fees: are $ 1450/yr Entertainment and recreation: $150/month Clothing: $50/wk Charity: $35/wk Personal medical and dental: $130/mth Insurance life and condo): $185/mth Savings: He'd like to save $200 every month. Miscellaneous: $200 to cover any unexpected expenses 1. Calculate Rick's monthly net income. 2. Prepare Rick's monthly budget. Also calculate the percent that each item represents of his total budget. Percent Item Monthly budget Income Total Income Mortgage Condo fees Insurance Transportation Utilities Entertainment and recreation Clothing Personal, Medical and dental Food Charity Savings Miscellaneous Total Expenses Total Income - Total Expenses Does his budget work with his income (ie does he make enough money?)? He forgot that he needed to buy a fridge and stove. This will cost him $1800. He decides to get a 2-year bank loan for this amount and this will cost him $82 every month Does he need to adjust his budget? Explain Rick is getting married in 2 years and has been asking his boss for some extra hours. His boss was happy to hear this and gave Rick 8 hours of OT (time and a half) per week during the busy season (30 weeks/year in total). Rick needs to save $12 000 above what he normally saves. Can he do it? Explain. What options does he have