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Finance Powerpoint
Finance Powerpoint
John Berka
Assets:
Monthly income of $6,166.67 $1,200 in checking $4,050 in savings $5,000 in CDs (4.9%) $89,000 in 403(b) plan $26,482 in an IRA $18,000 in his car $15,028 in 3 growth mutual funds $190,000 in his house $50,000 in personal property His total net worth is $353,760.
Liabilities:
$45,000 in debt Monthly expenses average $4,000 Mortgage payment is $1,228 Car payment is $529 Monthly child support of $420 He also deposits $650 in his 403(b) monthly He has no will and a $250,000 term life policy that still names his deceased wife as the beneficiary. Based on his assets and liabilities John can afford a monthly payment ranging from $1,750$2,450
Housing Option #1
Pros and Cons Pros: Walking distance to best areas of the city, owners remodeled the home and replaced most of the problems in the home that come with age. Cons: Built in 1912, commute to work could be long.
Housing Option #2
Pros and Cons Pros: Small, meets Johns needs, affordable, easy commute.
Housing Option #3
Pros and Cons Pros: Easy commute Cons: No information on website, Expensive for Johns needs.
Housing Option #4
Pros and Cons Pros: Affordable for Johns current situation, privacy, safety, jetted tub, built in 2001, very low crime rate (we checked), he could pay for a large portion of it just by selling the place he is in now. Cons: John doesnt need that much space.
Paying it off
If he pays the minimum monthly payment of $1,217.32 John will pay the house off in 30 years unless he decides to refinance. The total John would pay in interest is $10,617.60
Interest/Principle Graph
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years Principle Interest
Conclusion
The best choice for John would be to stay in the house he is currently residing in since the home is already close to being paid off. John would be likely to live there until retirement age where he could move into a retirement community.