Dave and Ellen are newly married and living in their first house. The yearly premium on their homeowner's insurance policy is $400 for the coverage they need. Their insurance company offers a discount of 5 percent if they install dead-bolt locks on all exterior doors. The couple can also receive a discount of 2 percent if they install smoke detectors on each floor. They have contacted a locksmith, who will provide and install dead-bolt locks on the two exterior doors for $45 each. At the local hardware store, smoke detectors cost $6 each, and the new house has two floors. Dave and Ellen can Install them themselves.
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- Hassad owns a rental house on Lake Tahoe. He uses a real estate firm to screen prospective renters, but he makes the final decision on all rentals. He also is responsible for setting the weekly rental price of the house. During the current year, the house rents for 1,500 per week. Hassad pays a commission of 150 and a cleaning fee of 75 for each week the property is rented. During the current year, he incurs the following additional expenses related to the property: a. What is the proper tax treatment if Hassad rents the house for only 1 week (7 days) and uses it 50 days for personal purposes? b. What is the proper tax treatment if Hassad rents the house for 8 weeks (56 days) and uses it 44 days for personal purposes? c. What is the proper tax treatment if Hassad rents the house for 25 weeks (175 days) and uses it 15 days for personal purposes?Michiko and Saul are planning to attend the same university next year. The university estimates tuition, books, fees, and living costs to be 12,000 per year. Michikos father has agreed to give her the 12,000 she needs to attend the university. Saul has obtained a job at the university that will pay him 14,000 per year. After discussing their respective arrangements, Michiko figures that Saul will be better off than she will. What, if anything, is wrong with Michikos thinking?Natasha is considering moving into a one-bedroom apartment in Winter Gardens. The apartment has a monthly rent of $1,750. Here are the fees that she has been quoted. How much is she expected to pay up front to rent this apartment? Application fee: 3% of 1 month's rent Credit application fee: $30 Security deposit: 1 month's rent Last month's rent Broker's fee: 9% of 1 year's rent
- Tim Navholtz needs a $20,000 renters insurance policy and has selected the $500,000 liability with $1,000 deductible. The insurance company has determined his credit is excellent and has given him the "good" credit rate. If he adds an endorsement of $0.85/$100 to ensure $12,600 of jewelry, $20/year for the options of identity theft/protection and $75/year for sewer/sump pump backup protection for his basement, find his annual premium using the given table. Click the icon to see a hypothetical table of Estimated Annual Renters Insurance Premium Rates. The annual premium is $. (Simplify your answer. Type an integer or a decimal.)Jack and Jill are saving for a rainy day and decide to put $60 away in their local bank every year for the next 30 years. The local Up-the-Hill Bank will pay them 8% on their account. a. If Jack and Jill put the money in the account faithfully at the end of every year, how much will they have in it at the end of 30 years? b. Unfortunately, Jack had an accident in which he sustained head injuries after only 10 years of savings. The medical bill has come to $800. Is there enough in the rainy-day fund to cover it?Rachel and Alexander Harrison need to calculate the amount they can afford to spend on their first home. They have a combined annual income of $67,500 and have $37,000 available for a down payment and closing costs. The Harrisons estimate that homeowner's insurance and property taxes will be $150 per month. They expect the mortgage lender to use a 28 percent (of monthly gross income) mortgage payment affordability ratio, to lend at an interest rate of 6 percent on a 30-year mortgage, and to require a 10 percent down payment. Based on this information, use the home affordability analysis form in Worksheet 5.3 to determine the highest-priced home the Harrisons can afford. Assume that closing costs are one-half of the down payment. Round the answer to the nearest dollar. $
- When Should Michael Pay Housing Costs? On April 1 of next year, Michael is purchasing a $225,000 condominium and has accepted the Tenth National Bank’s offer of a ten-year $182,250 loan with an interest rate of 7%. He has a gross annual income of $100,000 and is concerned about how much his one-time up-front costs and recurring monthly costs will be. He’s received the following data and form, but he’s not certain when he is to pay each cost—at closing, monthly, or both. Your task is to help Michael by completing the form and classifying the costs. Hint: Remember that the purchase is expected to close on the first of April. This means the following: • Although a year’s worth of a cost, such as the condominium’s property taxes, may be owed by the home buyer, a portion of the total cost will be paid by the seller. • A portion of a cost, such as the homeowner’s insurance premium, may be deposited into an escrow account so that the accumulated funds will be available to pay the…Can Olivia and Anthony Afford This Home Using the Monthly Income Loan Criterion? Next week, your friends Olivia and Anthony want to apply to the Fourth Global Bank for a mortgage loan. They are considering the purchase of a home that is expected to cost $125,000. Given your knowledge of personal finance, they’ve asked for your help in completing the Home Affordability Worksheet that follows. (Note: When completing the form, round each dollar amount to the nearest whole dollar.) To assist in the preparation of the worksheet, Olivia and Anthony also collected the following information: • Their financial records report a combined gross before-tax annual income of $125,000 and current (premortgage) installment loan, credit card, and car loan debt of $1,823 per month. • Their property taxes and homeowner’s insurance policy are expected to cost $3,125 per year. • Their best estimate of the interest rate on their mortgage is 7.5%, and they are interested in obtaining a 15-year loan.…To help Janette cover her college expense, parents provide Janette with a monthly allowance of $340. Besides, Janette earns $600 per month from the part-time job. Janette has to pay $200 in rent expense and $ 75 per month for her car insurance. Janette plans to spend monthly $80 on clothes, $50 for personal care, and $100 for entertainment. Janette also estimates her monthly eating out expense at $140, and she expects that $100 will be enough to cover all her other spending. Given that Janette follows the above income/spending schedule, how much can she put aside within eight months? Assume Janette puts the amount she put aside within eight months on the account that earns 4.75% per year, compounded annually. What would be the balance of this account in fiveyears? Round your answers to the nearest dollar.
- When Gustavo and Serrana bought their home, they had a 5.7% loan with monthly payments of $870.60 for 30 years. After making 78 monthly payments, they plan to refinance for an amount that includes an additional $35,000 to remodel their kitchen. They can refinance at 4.8% compounded monthly for 25 years, with refinancing costs of $625 included with the amount refinanced. Find the amount refinanced . Find their new monthly payment . How long will it take to pay off this new loan if they pay $1200 each month ?The Bainters want to estimate annual costs for purchasing the home so they can compare them with the costs they estimated for renting. These costs are expenses the Bainters will have only if they purchase instead of rent: monthly mortgage payment $200 per year for HOA fees $1,750 per year for property taxes $1,950 per year for home maintenance $75 per month for water and sewer services $10 per month for trash and recycling services $65 per month for internet $110 per month for homeowners' insurance Approximately how much should the Bainters budget for a year? Your answer should include the total amount the Bainters should budget the calculations or an explanation of how you determined the answerKathy plans to move to Maryland and take a job at McCormick as the Assistant Director of HR. She and her husband Stan plan to buy a house in Garrison, MD and their budget is $500,000. They have $100,000 for the down payment and McCormick will pay for closing costs. They are considering either a 30 year mortgage at 4.5% annual rate or a 15 year mortgage at 4%. Calculate the monthly payment for each. Property taxes and insurance will add $1,000 per month to whichever mortgage they choose. What should Kathy and Stan do? 15yr 30yr PMT: Monthly: