Fin111: Tutorial 5 Consumer Credit

Problems suspicion 1 A some years ago, Michael Tucker purchased a home plate for $100,000. Today the home is worth $150,000. His remaining owe balance is $50,000. Assuming Michael buttocks accept up to 80 percent of the market cheer of his home, what is the utmost amount he can borrow? 80% of market value ($150,000×80%)$120,000 (-) outstanding mortgage lend$ 50,000 $ 70,000 ? Maximum home righteousness loan Michael can borrow is $ 70,000. Question 2 Louise McIntyres semiannual gross income is $2,000. Her employer withholds $400 in federal, state and local income taxes and $ one hundred sixty in Social pledge taxes per month. Louise contributes $80 per month for her IRA. Her biannual denotation pays for visa, Master travel card and Discover separate are $35, $30 and $20 respectively. Her periodic payment on an automobile loan is $285. What is Louises debt payments-to-income proportion? Is Louise life history at bottom her operator? Explain. Louises debt payments-to-income dimension =monthly Debt PaymentsNet Monthly Income ×100% =$30+$35+$20+$285$2,000-$400-$160-$80 ×100% =27.21% ? Louises debt payments to income ratio are $370 to $1360, or 27.21 percent. This ratio exceeds the recommended 20 percent figure, which shows that she does non living within her means and was overextended.

The debt payment has become a nub to her with her current give the axet income. Her maximum monthly loan and credit card payments should not be over $272, which is the 20 percent of her net income. Question 3 Robert Thumme owns a $140,000 townhouse and still has an unpaid mortgage of $110,000. In appendix to his mortgage he has the following liabilities: Visa| $565| MasterCard| $480| Discover Card| $395| training add| $920| Personal edge Loan| $800| gondola Loan| $4,250| Total| $7,410| | | Roberts net worth (not including his home) is slightly $21,000. This comeliness is in mutual funds, an automobile, a coin collection, furniture, other face-to-face property. What is...If you want to get a full essay, magnitude it on our website: Ordercustompaper.com

If you want to get a full essay, wisit our page: write my paper