FINANCE PROJECT The objective of this project is to utilize finance formulas and investigate several factors related to financial decisions, such as budgeting, savings account, credit cards, and student loans. This project will require performing calculations within a spreadsheet program (Excel), analyzing the outcomes, and discussing the results of these calculations. Answers to the questions must be compiled into a single word-processing document (Microsoft word), including necessary explanatory text and supporting information from the calculations performed within the spreadsheet. Explanation and discussions of the answers must be in complete, grammatically correct sentences. The final document must be neat and organized with answers to the individual problems clearly labeled. Three individual projects throughout the semester will be submitted separately, and feedback will be provided on each individual project. The final project will consist all three individual projects, including revisions from the instructors’ feedback. When submitting the projects, the spreadsheet document and word-processing document must be submitted electronically via Bb. If you plan to use APA format (click on “APA Format” in Blackboard to see how this works— no need to include a cover page and abstract, you will get extra credit for including APA. 1 FINANCE PROJECT PART III: CREDIT CARDS 1. Find two credit card advertisements via online or paper-based. 2. For each credit card: Document the credit card advertisements with two different annual percentage rates. 3. With the first credit card advertisement… 3.1 You opened a new credit card with one year of 0% interest. You built a credit card debt of $9,000 from purchasing a new flat screen TV, a Mac laptop, and an all-inclusive trip to Europe. Calculate your monthly payment with the intent of paying it off in one year to avoid interest. 3.2 Assuming that you have college loans and you are using half of your debt payments to pay for college loans and the other half for credit card debts. Does the monthly payment that you calculated in Finance Project Part 3, #3.1 fit with your budget ($447.62/2 = $223.81 for student loan and credit card) from Finance Project Part 1, #1.3? Explain. 3.3 Using half of what you budgeted for paying off debts from your budget in the Finance Project Part I, #1.3, calculate your monthly payment if you intend to pay off your credit card debt after two, three, four, five years, and 10 years. (Assume that you have had the credit card for years and ignore any 0% APR for the first xx months). Explain if your debt will be paid off or not after two, three, four or five years. If your debt is not paid off after two, three, four, or five years, provide an estimate of when your debt will be paid off. Show your work and explain. 4. With the other credit card advertisement, 4.1.You opened a new credit card with one year of 0% interest. You built a credit card debt of $9,000 from purchasing a new flat screen TV, a Mac laptop, and an all-inclusive trip to Europe. Calculate your monthly payment with the intent of paying it off in one year to avoid interest. 2 4.2.Assuming that you have college loans and you are using half of your debt payments to pay for college loans and the other half for credit card debts. Does the monthly payment that you calculated in Finance Project Part 3, #3.1 fit with your budget ($447.62/2 = $223.81 for student loan and credit card) from Finance Project Part 1, #1.3? Explain. 4.3.Using half of what you budgeted for paying off debts from your budget in the Finance Project Part I, #1.3, calculate your monthly payment if you intend to pay off your credit card debt after two, three, four, five years, and 10 years. (Assume that you have had the credit card for years and ignore any 0% APR for the first xx months). Explain if your debt will be paid off or not after two, three, four or five years. If your debt is not paid off after two, three, four, or five years, provide an estimate of when your debt will be paid off. Show your work and explain. 5. Based on the calculations from #4 and #5 in Finance Project Part III, determine which credit card offers the better deal and explain why. Be sure to justify your answers. (Write at least 5 sentences) 3 FINANCE PROJECT PART IV: LOANS 1. Visit the https://studentaid.ed.gov/types/loans/subsidized-unsubsidized website and answer the following questions 1.1.As an undergraduate student, which loan would you qualify for: direct subsidized loan or direct unsubsidized loan? Explain. 1.2.As a graduate student, which loan would you qualify for: direct subsidized loan or direct unsubidized loan? Explain. 1.3. Find the interest rates for loans first disbursed from July 1, 2014 and before July 1, 2015 Table 4. Interest Rate for Student Loans UNDERGRADUATE STUDENTS DIRECT SUBSIDIZED LOANS DIRECT UNSUBSIDIZED LOANS GRADUATE STUDENTS 2. Calculate how much attending Gallaudet University for four years will cost. Assume that you will be an undergraduate student from the United States using room/board, health insurance, health service, and units for four years. (Use Gallaudet’s tuition and fee schedule for Fall 2014/Spring 2015). 3. Create a table (shown below) and answer the following questions: 3.1.Calculate your monthly payments, with the appropriate interest rate from Finance Project Part IV #1.3, with 12 payment periods per year and loan terms (y = 5, 10, 15, 30 years). Assume that you will begin your loan payments after you graduate. 3.2.Which of the monthly payments from Finance Project Part IV #3.1 fit with your budget? If you have two or more monthly payments that fit with your budget, which one would you choose and why? Explain. 3.3.For each monthly payment you calculated from Finance Project Part IV #3.1, calculate the total payment. Indicate how much interest was paid on the loan for each scenario (y = 5, 10, 15, and 30 years). 3.4.Based on your answers from Finance Project Part IV #3.3, calculate the percentage of interest paid and the percentage of principal paid for each scenario. 4 Table 5. Student Loans Monthly Payment, Principal, and Interest 5 years 10 years 15 years Monthly Payment Yes/No Total Payment Principal Interest % of Principal % of Interest 30 years 4. Explain what you learned from Finance Project Part IV, #3.1 – 3.4, and whether or not you would make adjustments to your budget for debt payments. 10 Finance Project Part 3: Credit Cards 1. Two Credit Card Advertisements:                     Figure 1:1 https://www.discovercard.com/cardmembersvcs/ Figure 1:3- https://creditcards.chase.com/creditcards/slate.aspx?iCELL=682Y&slatesplit=1& Figure 1:2 http://www.discovercard.com/cardmembersvcs/ Figure1:4- https://creditcards.chase.com/creditcards/slate.aspx?iCELL=682Y&slatesplit=1&     2. Two Different Annual Percentage Rates (APR): Discover’s APR is 10.99%, and Chase Slate’s APR is 12.99% if my credit scores are excellent.   MacBook Pro: $1,299 Samsung LED TV: $999 TOTAL: $2,298 3. Better Credit Card (Discover’s credit card of 10.99% is better and lower than Chase) 3.1 Monthly Payment 3.2 Fit With My Budget? No, I cannot afford $203.09 in one year because my monthly budget states $182.40 (see the picture). 3.3 Another Monthly Payments 2 years 3 years 4. Another Credit Card (Chase—12.99%) 4.1 Monthly Payment 4.2 Fit With My Budget? No, my credit card’s monthly payment of $205.24 does not fit with my budget of $182.40. 4.3 Another Monthly Payment 2 years 5. My Explaination (based on 3.1-3.3 & 4.1-4.3) Write at least 5 sentences     3 years     EXPLAIN (AT LEAST FIVE SENTENCES). 1. Subsidized or Unsubsidized Loan 1.1 Dafdlfa;jf……. 1.2 Dafdfadf…..         Please  do  not  find  another  interest  rate  via   the  Internet.    Read  your  Finance  Project   Guidelines  handout  (4.5%-­‐-­‐not  3.86%)!  You   can  ask  your  student  loan’s  company  what   your  interest  rate  is.         FYI:  I  am  using  Fall  2010/Spring  2011’s  sample.   You  need  to  find  Fall  2014/Spring  2015’s  tuition   and  fees  via  Gallaudet’s  website.   Use “International Students” (Developing Countries) in Fall 2010/Spring 2011. Below is an example of using Excel in four years: https://www.gallaudet.edu/Documents/Grad/Gallaudet-Graduate-Catalog-2010-2011.pdf 2. Gallaudet University’s Tuition and Fees The total of student loan is shown below: Tuition Unit Fee Room Board Health Insurance Fee Health Service Fee Total (per semester) $ $ $ $ $ $ $ Total of Student Loan: $ 8,137.50 138.00 2,730.00 2,200.00 1,880.00 50.00 15,135.50 121,084.00 In four years 3. Table of Monthly Payments and Interest/Principal Rates: 5 years Monthly Payment (3.1) Yes/No (3.2) No, my monthly debt payment is $132.70 (see my evidence below). 10 years No, my monthly debt payment is $132.70 (see my evidence below). Table 3: Monthly Budget Percentages Total Payment (3.3) Interest (3.3) Percentage of Interest (3.4) Percentage of Principal (3.4) 15 years 30 years No, my monthly debt payment is $132.70 (see my evidence below). No, my monthly debt payment is $132.70 (see my evidence below). 4. My Experience: [WRITE AT LEAST FIVE SENTENCES] Name: ____________________________ FINANCE PROJECT PART #4: STUDENT LOANS 1. Subsidized or Unsubsidized Loan 1.1 Dafdlfa;jf……. 1.2 Dafdfadf….. EXPLAIN (AT LEAST FIVE SENTENCES). 2. Gallaudet University’s Tuition and Fees The total of student loan is shown below: Tuition Unit Fee Room Board Health Insurance Fee Health Service Fee Total (per semester) $ $ $ $ $ $ $ Total of Student Loan: $ 8,137.50 138.00 2,730.00 2,200.00 1,880.00 50.00 15,135.50 121,084.00 (2 semesters * 4 years = 8 semesters) $15,135.50* 8 = $121,084 In four years 3. Table of Monthly Payments and Interest/Principal Rates: 5 years Monthly Payment (3.1) Yes/No (3.2) No, my monthly debt payment is $132.70 (see my evidence below). 10 years No, my monthly debt payment is $132.70 (see my evidence below). Table 3: Monthly Budget Percentages Total Payment (3.3) Interest (3.3) Percentage of Interest (3.4) Percentage of Principal (3.4) 15 years 30 years No, my monthly debt payment is $132.70 (see my evidence below). No, my monthly debt payment is $132.70 (see my evidence below). 4. My Experience: [WRITE AT LEAST FIVE SENTENCES]
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