Case Study: Personal Financial Planning

Question 1

$225 $250✔ $275

Revolt · Accepted Answer

✔ $275; According to your research, you need to budgetfor insurance and gasoline if you choose to buy or lease the new car.: $275; If you choose to buy the used car, you need to budget for insurance and gas.: $225

Question 2

17 34✔ 170

Revolt · Accepted Answer

✔ 170; You live 17 miles from work. You can expect to drive a minimum of miles per week.: 170; You will work about 48 weeks per year, so you can expect to drive a minimum of miles per year.: 8,160; You have a vacation planned and you expect to drive approximately 2,000 miles round trip. If you take the vacation, you stay under your mileage restriction if leasing.: will not

Question 3

Based on your budget, which transportation option is the best financial decision for you? Explain your answer in at least two sentences.

Revolt · Accepted Answer

Option C, buying a used vehicle, is the best financial decision. It has the lowest up-front cost of $2,000 and the lowest combined monthly cost of $475 for the payment, insurance, and gas. Over 36 months, it would cost about $19,100, which is less than either new-car option.

Question 4

Your used car payment will be $250 per month. What financial challenge do you now face?

Revolt · Accepted Answer

My car payment is higher than my discretionary spending.

Question 5

You will need to revise your budget to account for a car payment.Which expense category would be the most difficult to change or reduce?

Revolt · Accepted Answer

rent

Case Study: Personal Financial Planning Answers

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