CASE Study 1 (Becoming an Adult) You decide to move across country and pursue your dream as an actor/actress. You currently live in Washington, D.C. and you are looking to live within the Los Angeles city limits once you arrive in California. You drive a 2005 Mini Cooper S and it is paid for. You are 24 years old and your father currently pays for your car insurance, cellular phone, and health insurance. Your father has agreed to maintain your health insurance and car insurance until age 26. Once you turn 26, however, you will have to pay for your car insurance, cellular phone, health insurance, rent, and utilities (gas, water, and electric). At age 26, health insurance will cost $325/month to maintain and will increase 1.5% each year. You currently have $5000 in your savings account, which draws 1.5% interest annually. You have $2200 in your checking account, which earns 1% annually (both accounts are compounded monthly). You have decided to give it 5 years to make your life in the big city. If you do not receive a starring role by then, you are pointing your car east and returning home. You are able to rent a one bedroom apartment for $1200/month, but it requires the first and last month's rent as the deposit. There is a 5% fee to turn on each utility. You will spend 10% of your total salary on each utility (10% on gas, 10% on electricity and 10% on water). You spend $200/month on groceries and $100/month on entertainment. You decided that you needed flexible hours to pursue your dream, so you have taken a job as a server and a job as a fitness/dance instructor at the local spa. The server job pays $800/week and normally you earn 10% in tips. The fitness/dance instructor pays $40/class, and you normally teach 2 classes per week. You decide to use your credit card while traveling across country so that you would have cash for all your deposits once you arrived in L.A. You charged $1500 getting out to L.A. and since you are young, the credit card APR is 21%. Your waitressing job is 15 miles away from where you live and the fitness/dance job is 20 miles away. Your Mini Cooper S gets 30 miles to the gallon and has an 11.4 gallon tank. It requires an oil change every 5000 miles that costs $100 dollars. Routine maintenance on a Mini Cooper S runs about $1500 annually. How much will you have to return home if you stay all 5 years in L.A.? Do you make enough to stay in L.A.? How much will you need to make to stay in L.A.? CASE Study 1 (Becoming an Adult) You decide to move across country and pursue your dream as an actor/actress. You currently live in Washington, D.C. and you are looking to live within the Los Angeles city limits once you arrive in California. You drive a 2005 Mini Cooper S and it is paid for. You are 24 years old and your father currently pays for your car insurance, cellular phone, and health insurance. Your father has agreed to maintain your health insurance and car insurance until age 26. Once you turn 26, however, you will have to pay for your car insurance, cellular phone, health insurance, rent, and utilities (gas, water, and electric). At age 26, health insurance will cost $325/month to maintain and will increase 1.5% each year. You currently have $5000 in your savings account, which draws 1.5% interest annually. You have $2200 in your checking account, which earns 1% annually (both accounts are compounded monthly). You have decided to give it 5 years to make your life in the big city. If you do not receive a starring role by then, you are pointing your car east and returning home. You are able to rent a one bedroom apartment for $1200/month, but it requires the first and last month's rent as the deposit. There is a 5% fee to turn on each utility. You will spend 10% of your total salary on each utility (10% on gas, 10% on electricity and 10% on water). You spend $200/month on groceries and $100/month on entertainment. You decided that you needed flexible hours to pursue your dream, so you have taken a job as a server and a job as a fitness/dance instructor at the local spa. The server job pays $800/week and normally you earn 10% in tips. The fitness/dance instructor pays $40/class, and you normally teach 2 classes per week. You decide to use your credit card while traveling across country so that you would have cash for all your deposits once you arrived in L.A. You charged $1500 getting out to L.A. and since you are young, the credit card APR is 21%. Your waitressing job is 15 miles away from where you live and the fitness/dance job is 20 miles away. Your Mini Cooper S gets 30 miles to the gallon and has an 11.4 gallon tank. It requires an oil change every 5000 miles that costs $100 dollars. Routine maintenance on a Mini Cooper S runs about $1500 annually. How much will you have to return home if you stay all 5 years in L.A.? Do you make enough to stay in L.A.? How much will you need to make to stay in L.A
