Project #43205 - Finance

Tom and Michelle Richards

FIN 3330

Family Profile

Tom and Michelle Richards come to you seeking assistance regarding paying off debt. They have two kids, Johnny (15) and Tonya (13). The stress of the debt is affecting Tom and Michelle’s marriage which causing stress on the kids as well.

Tom is the assistant to the regional director for Traber Corp, a printer and paper company, based in Scranton, Texas. He earns $42,000 per year of gross income and pays total taxes of $8,500.

Tom and Michelle have really fine-tuned their budget and found an extra $150they can use towards paying off debt. However, they are not sure where to start or which debt to attack first. Please create an account at www.powerpay.org and answer the complete the following:

 

1.     Enter the data in the power pay software

2.     Please print screen creditor input page showing each debt entered.

3.     Please list each debt and how long it will take to pay off the entire balance by just making the minimum payments.

4.     Please explain what power payments are and how they might benefit Tom and Michelle.

5.     How much interest with Tom and Michelle pay over the life of all of their loans without power payments?

6.     Using the “Highest Interest First” method please provide the detailed schedule of payments that need to be applied.

7.     Use additional payments to see how much they will save by adding the extra $150 per month.

8.     Use the mortgage comparison calculator to see if bi weekly payments on their mortgage will save any money when compared to monthly payments. Assume their mortgage is financed over 30 years.

 

Creditor

Rate

Balance

Minimum Payment

Discover

21.00%

$     4,587.00

$                        160.48

American Express

18.00%

$     2,234.00

$                          89.36

Banana Republic

18.00%

$        853.00

$                          34.12

Sallie Mae

6.00%

$   17,200.00

$                        143.00

Ford Financial Auto

4.00%

 $   36,234.00

 $                        547.58

Wells Fargo Home

5.23%

 $ 153,322.00

 $                        903.58

 

Please watch this and do it based on this

https://www.youtube.com/watch?list=UUZYXr28tfYVaU6-CEHgs_Bw&v=LR-y8Fn_09A

Subject Business
Due By (Pacific Time) 10/19/2014 12:00 am
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