Assignment: Your Future after College in a Glance
For most college students once they graduate college and get that first pay-check, they go crazy spending money left and right. Well let's say that for once, we follow things "by the book." After you graduate you decide to do the following: buy a house, get a new car (whether new or used), start contributing $600 a month to a money market savings account, and begin paying back your college loan.
What I would like for you to do is to search online for a house and a car that you would like to own. In addition to these items, also look for a job that you would eventually like to have that hopefully pertains to your major. After all of this what you will be turning in to me, are the following:
HOUSE
1. Print off and attach the full-page details of the house that you picked out.
2. What city are you looking to live in?
3. You plan to pay 20% of the price of your home as a down payment and finance the rest of the cost. How much will you finance?
4. Now assuming that a bank offers you a 30-year loan at 5.3% compounded monthly to pay the balance of your loan, what monthly payments would you have in order to own the house after 30 years? (Show what you put into your calculator)
5. After paying on the loan for 10 years, you decide to refinance. How much do you still owe after 10 years? (Show what you input into your calculator)
6. After refinancing, what will be your new monthly payments if you have a new 20-year mortgage at 3.6% compounded monthly? (Show what you input into your calculator)
CAR
7. Print off and attach the full-page details of the car that you picked out (used or new).
8. Assuming that the dealership offers you 3-year loan at 4.7% compounded monthly, what payments would you have to make to own the car after 3 years? (Show what you put into your calculator)
OTHER EXPENSES
9. Since you are already trying to set aside $600 every month for retirement, how much money will you have in 20 years if you found a savings annuity that will offer 3.1% compounded monthly? (Show what you put into your calculator)
10. After 20 years of paying $600 a month, you decided to roll-over the amount into a new retirement account. You will pay $1000 a month into this new account which pays 7% interest compounded monthly. How much in total will you have after another 20 years? (Show what you put into your calculator)
11. Also, after graduating WT, you find that you have an outstanding loan of $25,000 to pay back to the school. Since you are ready to get rid of your debt as soon as possible, you decide to pay it off in 7 years. If the loan is compounded monthly at 6.8%, what payments will you need to make? (Show what you put into your calculator)
12. After graduation, you also have a $5000 credit card balance. You decide to stop making purchases on the card and start paying $200 a month to get it paid off. How long will it take you to pay off the card if it has a 15% interest rate compounded monthly? (Show what you put into your calculator)
JOB
13. Search online for a job that you would like to have right after college. Make sure it is in the city you plan on living in. Find the starting salary or the median salary for the job. Print off and attach the full- page details for your job.
14. Looking at the first 10 years after college, what are your monthly expenses? What are your yearly expenses? Sum together the results from #4, 8, & 11 along with your $600 for retirement, $200 credit card balance, and $1500 each month for general expenses.
15. Use the following chart to estimate the tax bracket for your chosen job. Then use the appropriate percentages to figure out your actual take-home-pay after taxes.
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Table 1. 2016 Taxable Income Brackets and Rates (Estimate)
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Rate
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Single Filers
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Married Joint Filers
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Head of Household Filers
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10%
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$0 to $9,275
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$0 to $18,550
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$0 to $13,250
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15%
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$9,275 to $37,650
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$18,550 to $75,300
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$13,250 to $50,400
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25%
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$37,650 to $91,150
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$75,300 to $151,900
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$50,400 to $130,150
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28%
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$91,150 to $190,150
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$151,900 to $231,450
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$130,150 to $210,800
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33%
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$190,150 to $413,350
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$231,450 to $413,350
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$210,800 to $413,350
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35%
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$413,350 to $415,050
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$413,350 to $466,950
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$413,350 to $441,000
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39.6%
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$415,050+
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$466,950+
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$441,000+
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16. Will the take-home salary of your chosen job support your expenses right out of college? Do you need to decrease your monthly expenditures or are you well within your budget?
17. The goal of this project is for you to "see" into the future and to hopefully prevent enormous amounts of debt right out of college. Remember that this is just a brief overview of a few expenditures - there are still vacations, family, insurance needs, significant others...that are not included here. Can you think of anything else that you would like to add?
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also include a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also Include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.