Harry and Belinda Johnson are considering trading their car in for a newer used vehicle so that Harry can have dependable transportation for commuting to work. The couple still owes $5,130 to the credit union for their current car, or $285 per month for the remaining 18 months of the 48-month loan. The trade-in value of this car plus $1,000 that Harry earned from a freelance interior design job should allow the couple to pay off the auto loan and leave $1,250 for a down payment on the newer car. The Johnsons have agreed on a sales price for the newer car of $21,000, with 5.65% APR/84 month loan.

(c) Harry and Belinda have a cash-flow deficit projected for several months this year (see Table 3-6 and Table 3-7). Suggest how, when, and where they might finance the shortages by borrowing.

Jable 3-6 2018 Unfinished Annual Budget Estimates for Harry and Belinda Johnson Yearly Monthly Total Averages Jan. Feb. Mar Apr. MayJune July Aug. Sept. Oct. Nov Dec ,080 4080 4,080 4,080 4080 4,080 400 400 4,080 4,080 4,080 4080 48,960 4,080.00 6400 6400 6400 6400 6400 6400 6400 6400 6400 6400 6.400 6.400 76,800 6400.00 30.00 0 3,000 2 50.00 10,510 10,510 10,510 10,510 10,510 10,510 10,510 13,510 10,510 10,510 10,510 10,510 129,120 10,760.00 Hamys salary Beindas salry 30 30 30 30 30 30 30 380 Income from trust OTAL INCOME EXPENSES Fixr ed Expanses Hoalth iraurance 1,600 1,600 1,600 1,600 1,600 1,600 1,700 1,700 1,700 1,700 1 1,650 00 300 300 300 300 300 300 350 350 350 350 350 350 3900 325.00 20.00 2,500 208 33 18 33 0600 1,200 10000 20 20 20 0 S00 500 500 500 Home purchase fund Renters insurance Automobile iraurance Auto loan payments Student lo an payments 300 300 300 00 300 0300 00 300 00300 300 3,600 30000 Saving lemergendies 100 100 100 hirrysretramart plan 195 1951 195 195 195 195 195 195 195 195 195 195 2340 19500 Bdindas retrement plan400 400 40 400 440 400 40400 40 400 40 400 40000 160 160 160 160 160 160160 160 160 160 1600 1,920 160.00 Cable TV and Intemet 500 500 500 500 500 500 500 500 500 500 500 500 6000 500.00 800.00 25.00 Total fixed expenses 6,565 6,565 6,565 6,565 6,5657,165 6,715 7435 7215 7215 7,515 7,815 83,900 6,991.67 800 800 800 odd searity taxes Automobile registration 800 800 800800 800800 800 ariab le Expenses 0 3,400 283 33 148 33 550 550 550 550 550 S50 S50 550 550 550 550 S50 ,600550.00 300 300 300 300 300 300 300 300 300 300300 300 3,800300.00 220.00 110 1,320110.00 220.00 100.00 Svings money market Revoling savings fund 250250 210 Food (home) Food (out Cdl phones Auto gas ropar Doctoridanis 110 110 110110110 110 110 220 220 220220220220 220 100 100 100 100 100100100 110 110110 110 220 220 220220220 100 100 100 100 100 ,200 out of pockot Medicines Clothing and upk Church and cha Gfts 60.00 170 2,040170.00 9667 50 400 300 1,47512292 160 160 160 160 160160 160 0 160 160 160 160 1,920 160.00 500 500 500500500 500 500 00 00 500500500 6.000 S00.00 150 1,800150.00 60 60 170 170 170 10170 170 170 170 170 100 100 100 100100 80 80 110 100 100 100-100 _100__ 100 1.160 Rubic tasportation Personal allowances Entertainmant European wacation 150 150150150 150 150 150 15015010 150 400 400400 400 400 200 200 I 200 i 360o Eco Anniverary dinner party 42 42 42 42 4242 42 Mscellancous Total variable 100 100 100100100100100 100 1,200 100.00 3,712 3,712 3,702 3,707 3,712 3,342 3,742 6,042 3,242 3,222 | 3.380 32so 44,795 3,73292 TOTALEXPENSES 10277 10277 10267 10272 10277 10,507 10457 13477 10457 10437 10,895 11,095 128,695 10,724.58 Difference (available 233 233243 238 233 3 385 585 425 far spending saving. inv esting and donating Revolving savings 0 385 585 withdrawals