Question

In: Accounting

Develop a budget for the fictitious Brown family and Create a chart of the family budget...

Develop a budget for the fictitious Brown family and Create a chart of the family budget

Mr. Brown is a city worker earning $16.54 per hour for a 40 hour week, 52 weeks per year. He also earns overtime at the standard overtime rate. This year he worked 500 hours overtime. He also earns a yearly bonus of $2000 for his satisfactory performance evaluation. What as his total combined income?

Mrs. Brown is a social worker with a salary of $26000 per year. She also works 10 hours per week part-time on weekends at a retail store in the mall an hourly rate of $7.50 and a commission of 10% of sales. Her yearly sales were $25,000. What is her total combined income?

Joe, their teenage son, works 20 hours per week part-time earning $6.50 per hour. Joe has a responsibility to pay for his own student class dues of $10 per semester, his own entertainment, and his own clothes and personal items. Create a projected budget for Joe that includes a detailed list of possible expenditures.

Sandy, their pre-teen daughter, is too young to work, but receives and allowance of $10 per week for completing her chores at home. Create a typical budget for a pre-teen using her allowance as income.

Their house mortgage payment is $992 monthly.

Maintenance for the home averages $200 monthly.

The family lives in an area with mass transportation available.

Family medical insurance is available through Mr. Brown's employer for $150 per month. There are routine co-payments for each visit to the doctor. The Brown family was fortunate that no family member was ill, but each member of the family had a health check-up with a co-pay of $35.00 for each visit. Mr. Brown has a monthly prescription with a co-pay of $15.00.

The family's income tax rate is 25%.

Mrs. Brown's hourly rate (her part-time work) is put into savings, which earns 10 % interest compounded annually. How much will be in the account at the end of one year?

The family owes $5000 on credit card accounts with an annual interest rate of 12%, which is 1% monthly. The required minimum monthly payment is $75.00. How long will it take to repay the balance if the minimum amount is paid? How much must they pay each month to pay off the balance in 5 years?

***Hint: Locate a credit card calculator online to configure this amount. Provide the link to the calculator that you used.

Mr. and Mrs. Brown need to save 5% of their net income for retirement. Include this in your chart.

Identify fixed and variable expenses for the Brown family.

Solutions

Expert Solution

Family Budget of Fictitious Brown Family Amount in $
Total combined income of Mr. Brown =          44,673.20
(16.54x40x52) + (16.54x500) + 2000
Total combined income of Mrs. Brown =          32,400.00
26000 + (7.5x10x52) + (25000x10%)
Projected Budet for Joe:
Earning of Joe            6,760.00
Expenses of Joe:
Student class dues (assuming 4 semesters)            40.00
Entertainment (assuming $50 spent per week)      2,600.00
Clothes (assumed)      1,000.00
Personal Items (assumed)      1,000.00            4,640.00
Yearly saving by Joe            2,120.00
Typical Budet for Sandy:
Allowance received by Sandy          520.00
Expenses done by Sandy (assuming $8 spent per week)          416.00
Yearly saving by Sandy                104.00
Total Yearly Income of Brown Family          83,833.20
(44673.20+32400+6760)
Yearly Expenditure of Brown Family:
House mortgage payment    11,904.00
Home maintenance      2,400.00
Transportation Expenses
(assumed $100 per person per week for 2 people)    10,400.00
Family Medical Insurance      1,800.00
Expenses on routine health check-ups for a fmaily of four      2,400.00
Expenses incurred by Joe      4,640.00
Expenses incurred by Sandy          416.00
Personal and Entertainment expenses of Mr. Brown      5,200.00
(assuming $100 spent per week)
Personal and Entertainment expenses of Mrs. Brown      6,500.00
(assuming $125 spent per week)
Annual expenses of Mr. Brown (clothes etc.)      3,000.00
Annual expenses of Mrs. Brown (clothes etc.)      4,000.00
Repayment of Credit Card Dues          900.00
Income Tax    20,958.30
Saving for retirement      3,853.66
         78,371.96
Surplus / (Deficit)            5,461.24
Fixed Expenses for Brown Family:
House mortgage payment    11,904.00
Family Medical Insurance      1,800.00
Repayment of Credit Card Dues          900.00          14,604.00

Variable Expenses for Brown Family:
Home maintenance      2,400.00
Transportation Expenses    10,400.00
Expenses on routine health check-ups for a fmaily of four      2,400.00
Expenses incurred by Joe      4,640.00
Expenses incurred by Sandy          416.00
Personal and Entertainment expenses of Mr. Brown      5,200.00
Personal and Entertainment expenses of Mrs. Brown      6,500.00
Annual expenses of Mr. Brown (clothes etc.)      3,000.00
Annual expenses of Mrs. Brown (clothes etc.)      4,000.00

         38,956.00
Mrs. Brown's Savings
Month Earning Interest for Month Closing Balance
January      300.00                 -          300.00
February      300.00            2.50        602.50
March      300.00            5.02        907.52
April      300.00            7.56    1,215.08
May      300.00          10.13    1,525.21
June      300.00          12.71    1,837.92
July      300.00          15.32    2,153.24
August      300.00          17.94    2,471.18
September      300.00          20.59    2,791.77
October      300.00          23.26    3,115.04
November      300.00          25.96    3,441.00
December      300.00          28.67

   3,769.67

Credit Card Dues Repayment
Year Month Opening Balance Interest for Month Repayment Closing Balance
1 1    5,000.00          50.00         75.00    4,975.00
1 2    4,975.00          49.75         75.00    4,949.75
1 3    4,949.75          49.50         75.00    4,924.25
1 4    4,924.25          49.24         75.00    4,898.49
1 5    4,898.49          48.98         75.00    4,872.47
1 6    4,872.47          48.72         75.00    4,846.20
1 7    4,846.20          48.46         75.00    4,819.66
1 8    4,819.66          48.20         75.00    4,792.86
1 9    4,792.86          47.93         75.00    4,765.79
1 10    4,765.79          47.66         75.00    4,738.44
1 11    4,738.44          47.38         75.00    4,710.83
1 12    4,710.83          47.11         75.00    4,682.94
2 13    4,682.94          46.83         75.00    4,654.77
2 14    4,654.77          46.55         75.00    4,626.31
2 15    4,626.31          46.26         75.00    4,597.58
2 16    4,597.58          45.98         75.00    4,568.55
2 17    4,568.55          45.69         75.00    4,539.24
2 18    4,539.24          45.39         75.00    4,509.63
2 19    4,509.63          45.10         75.00    4,479.73
2 20    4,479.73          44.80         75.00    4,449.52
2 21    4,449.52          44.50         75.00    4,419.02
2 22    4,419.02          44.19         75.00    4,388.21
2 23    4,388.21          43.88         75.00    4,357.09
2 24    4,357.09          43.57         75.00    4,325.66
3 25    4,325.66          43.26         75.00    4,293.92
3 26    4,293.92          42.94         75.00    4,261.86
3 27    4,261.86          42.62         75.00    4,229.48
3 28    4,229.48          42.29         75.00    4,196.77
3 29    4,196.77          41.97         75.00    4,163.74
3 30    4,163.74          41.64         75.00    4,130.38
3 31    4,130.38          41.30         75.00    4,096.68
3 32    4,096.68          40.97         75.00    4,062.65
3 33    4,062.65          40.63         75.00    4,028.27
3 34    4,028.27          40.28         75.00    3,993.56
3 35    3,993.56          39.94         75.00    3,958.49
3 36    3,958.49          39.58         75.00    3,923.08
4 37    3,923.08          39.23         75.00    3,887.31
4 38    3,887.31          38.87         75.00    3,851.18
4 39    3,851.18          38.51         75.00    3,814.69
4 40    3,814.69          38.15         75.00    3,777.84
4 41    3,777.84          37.78         75.00    3,740.62
4 42    3,740.62          37.41         75.00    3,703.03
4 43    3,703.03          37.03         75.00    3,665.06
4 44    3,665.06          36.65         75.00    3,626.71
4 45    3,626.71          36.27         75.00    3,587.97
4 46    3,587.97          35.88         75.00    3,548.85
4 47    3,548.85          35.49         75.00    3,509.34
4 48    3,509.34          35.09         75.00    3,469.43
5 49    3,469.43          34.69         75.00    3,429.13
5 50    3,429.13          34.29         75.00    3,388.42
5 51    3,388.42          33.88         75.00    3,347.30
5 52    3,347.30          33.47         75.00    3,305.78
5 53    3,305.78          33.06         75.00    3,263.84
5 54    3,263.84          32.64         75.00    3,221.47
5 55    3,221.47          32.21         75.00    3,178.69
5 56    3,178.69          31.79         75.00    3,135.48
5 57    3,135.48          31.35         75.00    3,091.83
5 58    3,091.83          30.92         75.00    3,047.75
5 59    3,047.75          30.48         75.00    3,003.23
5 60    3,003.23          30.03         75.00    2,958.26
6 61    2,958.26          29.58         75.00    2,912.84
6 62    2,912.84          29.13         75.00    2,866.97
6 63    2,866.97          28.67         75.00    2,820.64
6 64    2,820.64          28.21         75.00    2,773.85
6 65    2,773.85          27.74         75.00    2,726.58
6 66    2,726.58          27.27         75.00    2,678.85
6 67    2,678.85          26.79         75.00    2,630.64
6 68    2,630.64          26.31         75.00    2,581.94
6 69    2,581.94          25.82         75.00    2,532.76
6 70    2,532.76          25.33         75.00    2,483.09
6 71    2,483.09          24.83         75.00    2,432.92
6 72    2,432.92          24.33         75.00    2,382.25
7 73    2,382.25          23.82         75.00    2,331.07
7 74    2,331.07          23.31         75.00    2,279.38
7 75    2,279.38          22.79         75.00    2,227.18
7 76    2,227.18          22.27         75.00    2,174.45
7 77    2,174.45          21.74         75.00    2,121.20
7 78    2,121.20          21.21         75.00    2,067.41
7 79    2,067.41          20.67         75.00    2,013.08
7 80    2,013.08          20.13         75.00    1,958.21
7 81    1,958.21          19.58         75.00    1,902.79
7 82    1,902.79          19.03         75.00    1,846.82
7 83    1,846.82          18.47         75.00    1,790.29
7 84    1,790.29          17.90         75.00    1,733.19
8 85    1,733.19          17.33         75.00    1,675.53
8 86    1,675.53          16.76         75.00    1,617.28
8 87    1,617.28          16.17         75.00    1,558.45
8 88    1,558.45          15.58         75.00    1,499.04
8 89    1,499.04          14.99         75.00    1,439.03
8 90    1,439.03          14.39         75.00    1,378.42
8 91    1,378.42          13.78         75.00    1,317.20
8 92    1,317.20          13.17         75.00    1,255.37
8 93    1,255.37          12.55         75.00    1,192.93
8 94    1,192.93          11.93         75.00    1,129.86
8 95    1,129.86          11.30         75.00    1,066.16
8 96    1,066.16          10.66         75.00    1,001.82
9 97    1,001.82          10.02         75.00       936.84
9 98        936.84            9.37         75.00       871.20
9 99        871.20            8.71         75.00       804.92
9 100        804.92            8.05         75.00       737.97
9 101        737.97            7.38         75.00       670.35
9 102        670.35            6.70         75.00       602.05
9 103        602.05            6.02         75.00       533.07
9 104        533.07            5.33         75.00       463.40
9 105        463.40            4.63         75.00       393.03
9 106        393.03            3.93         75.00       321.96
9 107        321.96            3.22         75.00       250.18
9 108        250.18            2.50         75.00       177.69
10 109        177.69            1.78         75.00       104.46
10 110        104.46            1.04         75.00          30.51
10 111          30.51            0.31         30.81

                -

Minimum monthly payment of $111.22 to pay credit card dues of $5000 in 5 years calculated as below:

Credi Card Payment Calculator
Enter Values Loan Summary
Loan amount 5000.00 Scheduled Payment 111.22
Annual interest 12.00 % Scheduled Number of Payments 60
Loan period in months 60 Actual Number of Payments 60
Moratorium in months 0 Total Early Payments 0.00
Date of loan 5-Aug-2018 Total Interest 1673.33
Optional extra payments
Lender Name: INDIABULLS
PmtNo. Payment Date Beginning Balance Scheduled Payment Extra Payment Total Payment Principal Interest Ending Balance
1 05-Sep-18 5000.00 111.22 0.00 111.22 61.22 50.00 4938.78
2 05-Oct-18 4938.78 111.22 0.00 111.22 61.83 49.39 4876.94
3 05-Nov-18 4876.94 111.22 0.00 111.22 62.45 48.77 4814.49
4 05-Dec-18 4814.49 111.22 0.00 111.22 63.08 48.14 4751.41
5 05-Jan-19 4751.41 111.22 0.00 111.22 63.71 47.51 4687.71
6 05-Feb-19 4687.71 111.22 0.00 111.22 64.35 46.88 4623.36
7 05-Mar-19 4623.36 111.22 0.00 111.22 64.99 46.23 4558.37
8 05-Apr-19 4558.37 111.22 0.00 111.22 65.64 45.58 4492.73
9 05-May-19 4492.73 111.22 0.00 111.22 66.29 44.93 4426.44
10 05-Jun-19 4426.44 111.22 0.00 111.22 66.96 44.26 4359.48
11 05-Jul-19 4359.48 111.22 0.00 111.22 67.63 43.59 4291.85
12 05-Aug-19 4291.85 111.22 0.00 111.22 68.30 42.92 4223.55
13 05-Sep-19 4223.55 111.22 0.00 111.22 68.99 42.24 4154.56
14 05-Oct-19 4154.56 111.22 0.00 111.22 69.68 41.55 4084.89
15 05-Nov-19 4084.89 111.22 0.00 111.22 70.37 40.85 4014.51
16 05-Dec-19 4014.51 111.22 0.00 111.22 71.08 40.15 3943.43
17 05-Jan-20 3943.43 111.22 0.00 111.22 71.79 39.43 3871.65
18 05-Feb-20 3871.65 111.22 0.00 111.22 72.51 38.72 3799.14
19 05-Mar-20 3799.14 111.22 0.00 111.22 73.23 37.99 3725.91
20 05-Apr-20 3725.91 111.22 0.00 111.22 73.96 37.26 3651.95
21 05-May-20 3651.95 111.22 0.00 111.22 74.70 36.52 3577.24
22 05-Jun-20 3577.24 111.22 0.00 111.22 75.45 35.77 3501.79
23 05-Jul-20 3501.79 111.22 0.00 111.22 76.20 35.02 3425.59
24 05-Aug-20 3425.59 111.22 0.00 111.22 76.97 34.26 3348.62
25 05-Sep-20 3348.62 111.22 0.00 111.22 77.74 33.49 3270.89
26 05-Oct-20 3270.89 111.22 0.00 111.22 78.51 32.71 3192.37
27 05-Nov-20 3192.37 111.22 0.00 111.22 79.30 31.92 3113.08
28 05-Dec-20 3113.08 111.22 0.00 111.22 80.09 31.13 3032.98
29 05-Jan-21 3032.98 111.22 0.00 111.22 80.89 30.33 2952.09
30 05-Feb-21 2952.09 111.22 0.00 111.22 81.70 29.52 2870.39
31 05-Mar-21 2870.39 111.22 0.00 111.22 82.52 28.70 2787.87
32 05-Apr-21 2787.87 111.22 0.00 111.22 83.34 27.88 2704.53
33 05-May-21 2704.53 111.22 0.00 111.22 84.18 27.05 2620.35
34 05-Jun-21 2620.35 111.22 0.00 111.22 85.02 26.20 2535.33
35 05-Jul-21 2535.33 111.22 0.00 111.22 85.87 25.35 2449.46
36 05-Aug-21 2449.46 111.22 0.00 111.22 86.73 24.49 2362.74
37 05-Sep-21 2362.74 111.22 0.00 111.22 87.59 23.63 2275.14
38 05-Oct-21 2275.14 111.22 0.00 111.22 88.47 22.75 2186.67
39 05-Nov-21 2186.67 111.22 0.00 111.22 89.36 21.87 2097.32
40 05-Dec-21 2097.32 111.22 0.00 111.22 90.25 20.97 2007.07
41 05-Jan-22 2007.07 111.22 0.00 111.22 91.15 20.07 1915.92
42 05-Feb-22 1915.92 111.22 0.00 111.22 92.06 19.16 1823.85
43 05-Mar-22 1823.85 111.22 0.00 111.22 92.98 18.24 1730.87
44 05-Apr-22 1730.87 111.22 0.00 111.22 93.91 17.31 1636.95
45 05-May-22 1636.95 111.22 0.00 111.22 94.85 16.37 1542.10
46 05-Jun-22 1542.10 111.22 0.00 111.22 95.80 15.42 1446.30
47 05-Jul-22 1446.30 111.22 0.00 111.22 96.76 14.46 1349.54
48 05-Aug-22 1349.54 111.22 0.00 111.22 97.73 13.50 1251.81
49 05-Sep-22 1251.81 111.22 0.00 111.22 98.70 12.52 1153.11
50 05-Oct-22 1153.11 111.22 0.00 111.22 99.69 11.53 1053.42
51 05-Nov-22 1053.42 111.22 0.00 111.22 100.69 10.53 952.73
52 05-Dec-22 952.73 111.22 0.00 111.22 101.69 9.53 851.04
53 05-Jan-23 851.04 111.22 0.00 111.22 102.71 8.51 748.32
54 05-Feb-23 748.32 111.22 0.00 111.22 103.74 7.48 644.59
55 05-Mar-23 644.59 111.22 0.00 111.22 104.78 6.45 539.81
56 05-Apr-23 539.81 111.22 0.00 111.22 105.82 5.40 433.99
57 05-May-23 433.99 111.22 0.00 111.22 106.88 4.34 327.10
58 05-Jun-23 327.10 111.22 0.00 111.22 107.95 3.27 219.15
59 05-Jul-23 219.15 111.22 0.00 111.22 109.03 2.19 110.12
60 05-Aug-23 110.12 111.22 0.00 110.12 109.02 1.10 0.00

ekkarill92 answered 7 months ago
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