2 personal finance assignments.

Home and car purchasing:

1) The car you can afford.

Using the link below and decide how expensive of a car you can afford given the monthly payments and down payment you can make. Input your information, and write a brief summary of the results and your observation on the results that you get if you finance an automobile at 4.5% over:

1) Three years

2) Four years

3) Five years

Link: https://www.timevalue.com/tcalc-financial-calculators

Select: Personal

Select: How much car can I afford

If the above link does not work, use the following link:

 https://www.moneyunder30.com/car-affordability-calculator

Based on the result that you got for the three year loan, using the internet, look for a car that fits your budget and tell me why you would chose that particular car. Use the knowledge you have gathered from the chapters in answering the question.

2) The house you can afford.

a) Using the link https://www.fool.com/mortgages/how-much-house-can-i-afford.aspx and calculate how big of a mortgage you can afford based on the income you expect to earn once you graduate. The bottom two ratios on the page need a little explanation. In general, lenders like to cap the maximum monthly housing allowance (including taxes and insurance) by the lesser of these two ratios: 28% and 36%. According to the Gurus, your monthly housing allowance may not exceed 28% of your total monthly income and your total monthly obligations (monthly housing allowance plus any other long-term obligations) may not exceed 36% of your monthly income. So, leave those numbers as they appear. Use $5,500 for property tax, $3,000 for home insurance, and $25,000 for down payment.

a. Calculate the numbers you get for a 1.5%, 15 year mortgage

b. Calculate the numbers you get for a 2.5%, 30 year mortgage

ONCE YOU ENTER YOUR INFORMATION, YOU WILL BE ALLOWED TO SAVE THE INFORMATION BY CLICKING ON “PDF REPORT”. YOU WILL NEED TO SUBMIT THIS PDF DOCUMENT WITH YOUR ASSIGNMENT.

b) Using the “Mortgage amount” that you obtained for the 2.5%, 30 year mortgage, calculate your monthly payment for the loan? You will need to use the following link: http://www.bankrate.com/calculators/mortgages/mortgage-calculator.aspx?ic_id=home_smart-spending_mortgages_globalnav. YOU WILL NEED TO COPY AND PASTE THIS PAGE IN A WORD DOCUMENT, OR COVERT TO A PDF. THIS NEEDS TO BE SUBMITTED WITH YOUR ASSIGNMENT.

c) If you have five years to save $10,000 for down payment for your future house, what steps would you take to save the amount?