Question

Please answers ASAP!!!

3. Sara plans to graduate after next session (in 6 months) and would like to go on an overseas holiday to celebrate and before she starts full time employment. Her parents have agreed to give her $1,000 as a graduation present and she currently has $1,250 in her savings account. Sara has a part time job as a w aitress and plans to save as much as possible for her trip. Sara would like to plan her trip and has asked you to help her calculate how much she will have available for her trip. Prepare a budget for Sara given her income and expense information as follows:

Waitress job income of $350 per week;
rent (Sara’s share of an apartment) of $120 per week;
food of $80 per week;
utility bills (Sara’s share) of $60 per quarter;
mobile phone bill of $30 per month;
clothing expenses of $50 per month;
transport costs of $25 per week;
textbook and stationery expenses of $600 for the next 6 months.

a. How much will Sara have available for her holiday?
b. How can Sara increase the amount she has available for spending money for her holiday?

Explain the advantages and disadvantages of your answers.

4.

Fred would like to purchase his own home. He would like to know how much he can borrow based on what he can afford to repay. Prepare a budget for Fred and calculate his current savings capacity given his income and expense information as follows:

Gross (before tax) salary of $75,000 per annum; tax on salary of $20,400
rent of $390 per week;
groceries of $225 per week;

utility bills of $550 every quarter;
mobile phone bill of $65 per month;
clothing expenses and miscellaneous expenses of $90 per week;
petrol and other transport costs of $135 per week;
car repairs, car insurance, maintenance and registration of $3,120 per annum.

a. How much is Fred’s savings capacity? If current interest rates are 6%,what is the maximum home loan amount Fred can afford over a 20 year term? Assume monthly repayments.

b. Are there any expenses that will no longer be incurred if Fred buys his own home? Recalculate the maximum home loan amount Fred can afford available on the same terms as above.

Answer 1

1)SARA'S CASE

6 months = 2 Quarters

6 months =26 weeks

SARA
Weeks	26
Income	Amount Calculated for 6 Months
Reserves/Savings	$                  1,250.00
Parents	$                  1,000.00
Waitress Job income	$                  9,100.00
(350$ per week so considering six months so assuming 26 weeks)
Total Income	$               11,350.00
Expenses
Rent ($120 per week)	$                  3,120.00
Food ($80 per week)	$                  2,080.00
Utility ($60 per quarter)	$                     120.00
Mobile Bill($ 30 per month)	$                     180.00
Clothing Expense($50 per month)	$                     300.00
Transport cost ($ 25 per week)	$                     650.00
Textbook and Stationary Expenses	$                     600.00
Total Expenses	$                  7,050.00
Savings	$                  4,300.00

1) SARA would have $ 4300 as her saving for the trip

2) SARA can save more money buy decreasing some of the expenses like clothing and transport which she can easlily decrease.

Attaching pic of formulas which i have used in excel whicle solving this sum

Advantages of my answer-I have shared excel as well as written format so as to directly copy the answer

No Disadvantages

2)FRED'S CASE

1)

FRED
Weeks	52
Months	12
QUARTERS	4
Income	Annually
Salary	$               75,000.00
(-)TAX	$               20,400.00
Net Income	$               54,600.00
Expenses
Rent ($390 per week)	$               20,280.00
Groceries($225 per week)	$               11,700.00
Utility ($550 per quarter)	$                  2,200.00
Mobile Bill($ 65 per month)	$                     780.00
Clothing Expense($90 per week)	$                  4,680.00
Transport cost ($ 135 per week)	$                  7,020.00
Car repair Insurance	$                  3,120.00
Total Expenses	$               49,780.00
Savings	$                  4,820.00

Current Saving Capacity is 4820$ per year i.e he could afford a monthly emi of 4820/12= 401$

Assuming he pays rental income assuming he does not shifts immediately

Thus Considering EMI of $ 401 and ROI of 6%

Loan Amount

$                       56,064.94

Calculated using PV function in excel

Attaching screen short of excel formulas

2) Considering he does not pay rent in future maximim loan he can savings he can incure would be as per belwo table

Weeks	52
Months	12
QUARTERS	4
Income	Annually
Salary	$                  75,000.00
(-)TAX	$                  20,400.00
Net Income	$                  54,600.00
Expenses
Rent ($390 per week)
Groceries($225 per week)	$                  11,700.00
Utility ($550 per quarter)	$                    2,200.00
Mobile Bill($ 65 per month)	$                        780.00
Clothing Expense($90 per week)	$                    4,680.00
Transport cost ($ 135 per week)	$                    7,020.00
Car repair Insurance	$                    3,120.00
Total Expenses	$                  29,500.00
Savings	$                  25,100.00
Monthly Savings	$                    2,091.67
Loan Amount	$              2,91,956.45

Attaching screenshot of formulas