Monthly cash flow
Chapter13: Comparative Forms Of Doing Business
Section: Chapter Questions
Problem 41P
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He does office work full time at a law firm and earns $35,000 annually.
- $650 rent (all inclusive except electricity)
- $400 per month for food (including dining out)
- car loan was for a principal of $6000 at 3.99% on a 36-month repayment plan
- federal subsidized Stafford loan was for a principal of $25,000 at 6.8% on a 10-year repayment plan
- internet/TV/phone bundle is $124.85 per month
- smoking estimate is 2 cigarettes/1 day x 365 days/1 year x 1 pack/20 cigarettes x $6/1 pack = $222 plus a few more when stressed out, so about $240 per year
- cell phone plan has unlimited voice and texting for $100 per month
- three lattes per week at $5 per latte is $60 per month
- electricity is $50 per month
- all other purchases average $250 per month (both necessities and non-necessities)
- gas for the car is $200 per month
- “catastrophe” health insurance premium is $40 per month
- car insurance is $80 per month
- Netflix streaming is $8.65 per month
- The combined minimum monthly payments on his credit cards total $75 this month
- $30 to Visa
- $15 to MasterCard
- $15 to Discover
- $15 to Kohl’s Charge
- Each month Joe has deducted from his paycheck: 164.79 FICA, 256.75 federal income tax, and 175.00 401(k) contribution
- Joe plays trumpet and has gigs each month that bring in about $200 each month (just ignore taxes on this for simplicity)
- Compute Joe’s monthly
cash flow .
income
Expenses
Monthly cash flow_________________
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