CONSOLIDATINGLOANSRoberto and Julie Hernandez are struggling to make their monthly payments. They haveaccumulated too much debt, which was easy to do with two young kids at home. Julie works30 hours a week and takes care of the kids after day care. Their credit history was poor, result-ing in high interest rates on loans. However, a few months ago Roberto added a second job, andthey have been making payments regularly for 5 months.1. Find the monthly payments on each of the following purchases and the total monthlypayment.PurchaseHonda AccordFord truckHome2nd mortgageon homeOriginalLoanAmount$18,800$14,300$126,800Interest Term ofRate Loan12%18%61%$4,500 12%ItemHonda AccordFord truckHome2nd mortgage onhomeExpensePayments on debt from 1. aboveCar insuranceHealth insuranceReal estate taxes andinsurance on home2. These monthly expenses do not include car insurance ($215 per month), health insurance($290 per month), or real estate taxes and insurance on their home ($3350 per year),among other expenses. Find their total monthly outlay for all of these expenses.Car insuranceHealth insuranceReal estate taxes and insurance on homeTotal4 years4 years.15 yearsCurrentLoanAmount3 years.Total3. A loan officer told them that they can (1) refinance the remaining $14,900 amount on theHonda Accord at 12% over 4 years, (2) refinance the remaining $8600 loan amount on theFord truck at 12% over 3 years, (3) refinance the remaining $121,850 loan amount on theirhome at 5% over 30 years, and (4) reduce their car insurance payments by $28 per month.Complete the following table.4. Find the reduction in their monthly payments.MonthlyPaymentMonthlyOutlayNewInterestRate502 CHAPTER 12 Business and Consumer LoansNewTerm ofLoanNewMonthlyPaymentPart of the savings in the monthly payment came from reducing the interest rates. Theremainder of the savings came from extending the loans further into the future, meaningthat the Hernandez family will, in the long run, pay more interest. But at least their currentbills are reduced by $715.11 per month. Their goal now is to avoid new debt and pay offsome of the existing debt.INVESTIGATEThe interest rate that you are charged for borrowing money differs depending on the bankyou go to for a loan. Find current interest rates for financing a 2-year-old Toyota Camryfrom at least two banks in the area in which you live. Then go online and look for a lowerinterest rate.

“Since you have posted multiple questions, we will provide the solution only to the first question…

Answered: CONSOLIDATING LOANS Roberto and Julie…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Instructions Answer the journal prompts according to the scenario below: Joe-Bob wants to buy a car and will need to take out a loan in order to make the purchase. His current monthly income is $3,500 per month. His mortgage payment is $900 per month, and his student loan payment is $350 per month. Note: You do not need to take taxes into consideration for this journal. According to the affordability formulas given, can he afford to take out another loan? • When should he follow the affordability formulas? In what cases should he not? • How could taking out the car loan impact his other priorities?
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A friend of yours just bought a new sports car with a $5,000 down payment,and her $30,000 car loan is financed at an interest rate of 0.75% per month for 48 months. After two years, the “Blue Book” value of her vehicle in the used-car marketplace is $15,000. Solve, a. How much does your friend still owe on the car loan immediately after she makes her 24th payment? b. Compare your answer to Part (a) to $15,000. This situation is called being “upside down.” What can she do about it? Discuss your idea(s) with your instructor.
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3.51 Jennifer Lee, an engineering major in her junior year, has received in the mail two guaranteed-line-of-credit applications from two different banks. Each bank offers a different annual fee and finance charge. Jennifer expects her average monthly balance after payment to be $500 and plans to keep the card she chooses for only 24 months. (After graduation, she will apply for a new card.) Jennifer's interest rate (on her savings account) is 8% compounded daily. Terms Annual fee Finance charge Bank A Bank B $25 Free 1.65% monthly interest rate 20% annual percentage rate (a) Compute the effective annual interest rate for each card. (b) Which bank's credit card should Jennifer choose?
Directions: For each scenario, use the items in the tables to indicate whether the item will improve or decrease the individuals credit score. Then answer the question that follows. George just turned 21 and has applied for a few credit cards. Here are some details about his profileItem Improve or decrease credit scoreHe currently has 2 credit cards He got his first credit card 8 months ago He has no student loans He has applied for 4 credit cards in the last year (and had 2 applications accepted) He opened his last credit card 4 months ago All of his credit cards currently have a balance, as he has trouble paying off his card each month He has $5,000 currently outstanding on all his credit cards He missed a payment in the last three months when he forgot to notify the card company that he had recently moved out of his apartment. He was 30 days behind on making a payment. He has no cards currently past due His credit card balances of $5,000 are about 55%…
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Show Your Work Brian just purchased a home for $300,000 and made the required down payment of 20% ($60,000) to avoid PMI. Therefore, he is financing $240,000 over 30 years (360 months) at 3%. A) How much are his payments on the loan? B) His husband, Greg, is a great financial planner and says it would be very prudent to pay an EXTRA $200 per month on the mortgage payments. How many monthly payments will this “knock off” or reduce on the original 360 payments? How much interest will be saved over the life of the loan by making the extra $200 per month payment?

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