MATH201 - Portfolio Project - Kylene Adkins
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School
Bryant & Stratton College *
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Course
201
Subject
Mathematics
Date
Apr 3, 2024
Type
docx
Pages
11
Uploaded by kylenej
1
Kylene Adkins
Portfolio Project
MATH201 College Mathematics: Quantitative Reasoning
Instructor G. Loria
February 16, 2024
2
Introduction
This project enables students to put together a portfolio putting together the knowledge gained from the course. The project highlights the course outcomes and displays that they have been met by showcasing the outcomes in a practical, real-world scenario. This project has reinforced and enhanced my mathematical knowledge by portraying how I will use these skills in
my future career. People use percentages for many situations, this portfolio gives a glimpse of how to use them to make a path for your future. Furthermore, other calculations we use almost daily are used from simple addition/subtraction to ratios and graphical representations.
Part 1 - Budget Basics
Budget Basics
a)
Monthly Net Pay
3
Table 1: Income
Profession:
Licensed Social Worker
Annual Salary:
$ 55,350
Gross Monthly Pay (
rounded to the
cent
):
Annual salary divided by 12 Show your work!
$4612.50
$55350/12
Monthly Net (take-home) Pay (
rounded to the cent
):
Gross monthly pay minus 20% for
income taxes, FICA taxes, and health
insurance deductions
Show your work!
$3690
$4612.50*0.2= $922.50
$4612.50 - $922.50 = $3690
b)
Monthly Expenses
Table 2: Monthly Expenses
Budgeted Category
Category Details
Total Budgeted Amount
Percent of Total Take Home Pay (Rounded to Nearest Whole Percent) – Show work
Housing
(Need)
Rent or mortgage payment = 0
property taxes = 0
repairs = 75
etc.
$75
2%
Work:75/3690(100)
Food
(Need)
Groceries = 450
going out to eat = 50 small snacks (lattes, vending machine, etc.) =10 $510
14%
Work:510/3690 (100)
Insurance
(Need)
Home =70 Auto = 70
$140
4%
Work: 140/3690(100)
Transportati
on
(Need)
Car payment = 0
Fuel = 100
Oil change = 15
$115
3%
Work: 115/3690(100)
Utilities
(Need)
Water = 75
Electricity = 250
$430
12%
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Internet = 40
Trash = 20
Phone = 45
Work: 430/3690(100)
Personal care
(Want)
Clothing = 40 Toiletries= 35
$75
2%
Work: 75/3690(100)
Entertainme
nt
(Want)
Anything fun (leisure activities) = 200 Gym Membership = 20 Subscription Boxes = 15
Vacation = 50
Birthday/Holiday gifts = 25 $310
8%
Work: 310/3690(100)
Miscellaneo
us
(Want)
Pet Expenses = 30 Student Loan Payment = 150 $180
5%
Work: 180/3690(100)
Savings
(Savings)
Retirement/Savings = 1000
Emergency Fund (leftover income) = 855 $1855
50%
Work:
1855/3690(100)
TOTAL
$ 3690
100%
Table 2: Monthly Expenses
c)
Create a Monthly Expenses Pie Chart
Needs
35%
Wants
15%
Savings
50%
Where My Money Goes Each Month
Needs
Wants
Savings
d)
Compare your Monthly Expense Ratios to the 50-30-20 Rule
5
I.
The pie chart with the percentages of my budget is very close to the 50-30-20 rule visually. However, upon inspection and using the legend, my pie chart is very different. My 50 is savings, 35 needs, and 15 for wants.
II.
Comparing my chart to that of the 50-30-20 rule, I see that I can have some flexibility. The figures I used were very conservative. The numbers I used are based upon my expenses at this time. I own the property and home I live in, so I am not faced with a mortgage. After I gain employment in my career field, I am sure some new expenses will show their heads. My needs will raise while my savings decrease. According to the pie chart, I have plenty in savings each month. When employment is gained, I will shift to needs from savings to cover these new expenses; repairs and upgrades will be budgeted in. I will add insurances for life and
health. Transportation will significantly increase as I will hopefully go into debt for a newer, more dependable vehicle. I don’t foresee much change in utilities. My wants currently are only 15%. Based on the 50-30-20 rule,
I could ideally increase my retail therapy a bit. Instead of putting my wants last, I will shift from savings to indulge myself a little more. That seems like a good reward for myself after putting me last to gain my new career path and ultimately a new way of living.
Part 2 - Debt and Expenses
Debt and Expenses
a)
Calculate your Debt-to-Income Ratio
6
I.
Debts:
Student Loan:
$150
Total Debt:
$150
Gross Monthly Income:
$4,612.50 ($4612 for this project)
My debt-to-income ratio is 150:4612 or 3%.
II.
My debt-to-income ratio comes in at 3%. This is well below the recommended 43%. This is very good, although that number will rise once I add some debt such as a car.
b)
Calculate your Life Insurance Policy
I.
Gross Annual Income: $55,350
55350 gai x 10 = $553,500
$553,500 is my recommended life insurance needed.
II.
Dependents are individuals that depend on you for their financial needs. Younger and more dependents would need more insurance to cover expenses as the dependents become independent. An older individual with few or no dependents will usually only leave debt, not anyone that would need years of financial security as they become of age to be independent.
c)
Calculate your Retirement Savings I.
Age now 43
Age 65 22 years x 12 months = 264 months x $1000 = $264,000
Age 70 27 years x 12 months = 324 months x $1,000 = $324,000
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II.
If I retired at 65, I feel I would be borderline on having enough savings. With the budget amounts, it costs me $22,020 per year to cover expenses.
65 = $264,000 retirement ÷ $22,020 = 12 years covered
70 = $324,000 retirement ÷ $22,020 = 14.7 years covered
I could see about putting my $1,000 into an interest-bearing account so it will earn more money for my retirement.
d)
Calculate your Emergency Fund I.
$1,835 expenses x 6 months = $11,010 emergency fund
$11,010 fund ÷ $855 monthly = 13 months
It would take me 1 year and 1 month to save the recommended $11,010 for my emergency fund.
Part 3 – Mortgage, Monthly Payments, and Analysis
Mortgage, Monthly Payments, and Analysis
a)
Determine Documents for Mortgage Pre-Approval
The documents you need to bring will help review and verify credit and financial situations. Here is a list of documents, according to Bankrate.com, that you will need to get a mortgage:
Document
Time Period Needed to Cover
Pay Stubs
30 days
Tax Returns & W-2s
2 years
Bank Statements
2 months
Employment Information
2 years
Business Records (Self-Employed)
2 years
Other Income Sources
Current
Account Statements (401(k), IRA, CDs, investments)
Current
Down Payment Gift Letter (If applicable)
Current
Loan Statements
60 days
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Other Real Estate Information (if applicable)
Current
Credit Reports
Current
Rental History – proof of past payments
2 years
Driver’s License, Social Security Card, other forms of ID
Current
Recent Residences – Length of time there
5 years
b)
Research Houses of Interest
Address, City, State
List Price
Number of
Bedrooms
Number of
Bathrooms
Square
Footage
20637 Seneca Trl.
Marlinton, WV 24954
$149,900
3
2
2,224 ft²
178 Henry Ave.
Davis, WV 26260
$260,000
3
1.5
4,249 ft²
2840 Castle Hayne Rd.
Castle Hayne, NC 18429
$250,000
3
2
1,557 ft²
331 Lick Branch Rd.
Charleston, WV 25312
$87,000
4
2
3,240 ft²
42 Pine Cone Dr.
Elkview, WV 25071
$136,000
3
1
1,397 ft²
c)
Calculate Monthly Payment
House Address
Monthly Payment
Marlinton
$777.85
Davis
$1,368.90
9
Castle Hayne
$1,315.21
Charleston
$440.19
Elkview
$703.24
d)
Calculate Housing Ratio
I.
Formula: Monthly Pay/Net Monthly Pay = Housing Ratio
House Address
Housing Ratio
(Show all work)
Marlinton
777.85/3690 = 0.211 =
21%
Davis
1368.90/3690 = 0.371 =
37%
Castle Hayne
1315.21/3690 = 0.356 = 36%
Charleston
440.19/3690 = 0.119 =
12%
Elkview
703.24/3690 = 0.191 =
19%
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II. Keeping in mind of the recommended 20% housing ratio, only two houses fall under that percentage. The homes in Charleston, WV for $87,000.00 and Elkview for $136,000.00 are the options that stay within my budget. e)
Calculate Total Amount Paid and Interest
The house that is within my budget I would like to purchase would be the Charleston, WV home.
I.
After 30 years, the total amount paid is …
$440.19 * 12 = $5282.28 paid per year
$5282.28 * 30 = $158,468.40
total paid.
II.
The total interest paid in 30 years is …
Price
$87,000
Down Payment
-$5000
$82,000 – Amount Borrowed
Total Paid
$158,468.40
Total Borrowed
-$82,000.00
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$76,468.40 total interest paid.
f)
Calculate Closing Costs
List Price
$87,000.00(.05) = $4,350.00 closing costs
g)
Financial Analysis
The budget in this project projects my expected income in around four to five years. At that time, according to the math, my financial portfolio will accommodate the purchase of
this home. I could no way consider purchasing anything more than a cardboard box right
now with my low earnings. This is one of the reasons I am going back to school and earning my degree. The proof is in the numbers.