5-1 FIN 250

Description

Overview

In this milestone, you will consider the purchase of a new home or vehicle and revise your personal financial plan to reflect your long-term financial goals. If you are not considering a new home or vehicle at this time, you may consider the future purchase of a vacation home or a recreational vehicle. You will submit this milestone in Module Five.

Directions

In this milestone, complete one of the worksheets listed below (which accompany your textbook) and a short paper. These worksheets can be found in the MyFinanceLab Multimedia Library section of your MyFinanceLab. You will go to the Pearson website to access these Worksheets. Select the worksheet that is most relevant to your financial situation.

Worksheet 11: Worksheet for Calculating the Maximum Monthly Mortgage Loan for Which You Qualify

On this worksheet, you will calculate your maximum mortgage level based on factors that include your income and the amount that you have saved for a down payment. Review Figure 8.7 in your textbook for an example of a completed maximum mortgage worksheet. Use a conventional mortgage with a 20% down payment. Ensure you specify your assumed mortgage length and interest rate.

Worksheet 9: Worksheet for the Lease Versus Purchase Decision

On this worksheet, you will perform a lease versus purchase analysis for a new car. Review Figure 8.3 in your textbook for an example of a completed vehicle lease versus purchase worksheet. Ensure you specify the length of the loan and the lease (they should be the same), the interest rates for the loan and the lease, and the assumed opportunity cost rate of return.

Short Paper: Write a short summary (1?2 pages). Include the following rubric criteria:

Why did you choose the specific analysis that you performed (mortgage analysis or vehicle lease vs. purchase analysis)?

How will the analysis that you performed affect the financial plan that you submitted for Milestone One? Describe specific changes that will be required.