Question

1 Approved Answer

Posted on Jul 15, 2024

Hi, I am stuck in a homework, do not know how to start it. The below information is given and asked to create a debt

Hi,

I am stuck in a homework, do not know how to start it. The below information is given and asked to create a debt repayment plan to be presented to the client. The final plan should be neat, easy to understand, and should contain Action Steps for the client to follow.

Amy Smith has come to your office for advice regarding a debt repayment plan. Amy is a single mom who recently completed nursing school. Unfortunately, she supported herself and her child largely through use of debt while she was attending school and could work only part time. Now that she has finished school, she is earning enough to live comfortably and can put some extra money toward paying off debt instead of just paying the minimum each month as she has been doing over the past several years. Amy would like you to help her develop a repayment plan that will result in a lower amount of interest paid and pay off her debts as quickly as possible. The following is a list of Amy's current debts. JC Penny's credit card: Current balance is $5,500, Interest rate of 17.99%, Minimum payment is $82.50 Walmart credit card: Current balance is $3,100, Interest rate of 12.99%, Minimum payment is $46.50 Citibank credit card: Current balance is $8,250, Interest rate of 13.25%, Minimum payment is $165 Chase credit card: Current balance is $950, Interest rate is 9.99%, Minimum payment is $14.25 Personal loan from credit union: Borrowed $10,000 at 8% for 60 months. So far, she has made 4 monthly payments of $202.76.

Student loans: Balance $8,789 at 6.8% for 120 months. The first payment of $101.14 is due this month. Amy believes that she can pay a total of $785 per month toward her debts.

There are two templates that are provided.

** I cannot be able to post any comments, so updating here. This is all the information I got. Can you be more specific what information do you need?

# There is no way to attach any file. How can I attach one? image text in transcribed

Debt Analysis Case.pdf x Debt Analysis Rubic Criteria Largest Interest Reduction Each debt should be managed to result in the highest reduction in overall interest paid by the debtor. Order of Payoff Debts should be paid off in the order which will result in the shortest period of time to become debt free. A3 Debt Reduction Plan Beginning Date /_/ Ms. Amy Smith Debt Reduction Plan Beginning Date / -/ Current Plan Minimum Months to Payment Payoff Total Proposed Plan Months to Total Payoff Interest Name of Creditor Balance % Rate Payment Interest Saved Interest Debt A $2,000.00 $50.00 69.1 $1,454.40 20.90% $250.00 8.7 $172.50 $1,281.90 Debt B $6,000.00 $200.00 36.6 $1,327.92 13.25% $400.00 16.5 $595.75 $732.17 $0.00 $0.00 UNUMI #NUMI 15.00% $0.00 ANUMI #NUM! #NUMI $0.00 $0.00 HINUM INUM! 17.00% $0.00 #NUM! #NUM! #NUMI $0.00 $0.00 #NUM! #NUM! 6% $0.00 #NUMI #NUMI #NUM! $0.00 $0.00 #NUM! 8.00% $0.00 $ #NUM! #NUM! #NUM! HNUM! 5 years, 9 months 9 #NUM! ANUM! 1 years, 5 months Totals $8,000.00 #NUMI #NUMI Action Steps: 1) 2) 3) 4) Amy's Debt Reduction Plan + Credit Card Repayment Calculator Input your information into the green cells only. Credit Balance APR Compounding Periods Effective Interest Rate Monthly Payment 5,000.00 6.00% 12 6.17% 82.50 73 Number of months to pay off loan Total Interest Paid Interest Paid / Loan Amount S971.65 19% Monthly Payment Balance Interest Principal New Balance Cumulative interest 1 5.000.00 2 4.942.50 3 4.884.71 4 4.826.64 5 4.768.27 6 4.709.61 7 4.650.66 8 4,591.41 9 4.531.87 10 4.472.03 11 4.411.89 12 4.351.45 13 4.290.71 14 4.229.66 15 4.168.31 16 4.106.65 17 4.044.68 18 3.982.41 19 3.919.82 201 3856 92 Credit Card Repayment 82.50 82.50 82.50 82.50 82.50 82.50 82.50 82.50 82.50 82.50 82.50 82.50 82.50 82.50 82.50 82.50 82.50 82.50 82.50 82 50 + 25.00 24.71 24.42 24.13 23.84 23.55 23.25 22.96 22.66 22.36 22.06 21.76 21.45 21.15 20.84 20.53 20.22 19.91 19.60 1928 57.50 57.79 58.08 58.37 58.66 58.95 59.25 59.54 59.84 60.14 60.44 60.74 61.05 61.35 61.66 61.97 62.28 62.59 62.90 63.22 4,942.50 4,884.71 4,826.64 4,768.27 4,709.61 4,650.66 4,591.41 4,531.87 4.472.03 4,411.89 4,351.45 4,290.71 4,229.66 4.168.31 4,106.65 4,044.68 3.982.41 3,919.82 3,856.92 3793 70 25.00 49.71 74.14 98.27 122.11 145.66 168.91 191.87 214.53 236.89 258.95 280.71 302.16 323.31 344.15 364.68 384.91 404.82 424.42 443 70 Debt Analysis Case.pdf x Debt Analysis Rubic Criteria Largest Interest Reduction Each debt should be managed to result in the highest reduction in overall interest paid by the debtor. Order of Payoff Debts should be paid off in the order which will result in the shortest period of time to become debt free. A3 Debt Reduction Plan Beginning Date /_/ Ms. Amy Smith Debt Reduction Plan Beginning Date / -/ Current Plan Minimum Months to Payment Payoff Total Proposed Plan Months to Total Payoff Interest Name of Creditor Balance % Rate Payment Interest Saved Interest Debt A $2,000.00 $50.00 69.1 $1,454.40 20.90% $250.00 8.7 $172.50 $1,281.90 Debt B $6,000.00 $200.00 36.6 $1,327.92 13.25% $400.00 16.5 $595.75 $732.17 $0.00 $0.00 UNUMI #NUMI 15.00% $0.00 ANUMI #NUM! #NUMI $0.00 $0.00 HINUM INUM! 17.00% $0.00 #NUM! #NUM! #NUMI $0.00 $0.00 #NUM! #NUM! 6% $0.00 #NUMI #NUMI #NUM! $0.00 $0.00 #NUM! 8.00% $0.00 $ #NUM! #NUM! #NUM! HNUM! 5 years, 9 months 9 #NUM! ANUM! 1 years, 5 months Totals $8,000.00 #NUMI #NUMI Action Steps: 1) 2) 3) 4) Amy's Debt Reduction Plan + Credit Card Repayment Calculator Input your information into the green cells only. Credit Balance APR Compounding Periods Effective Interest Rate Monthly Payment 5,000.00 6.00% 12 6.17% 82.50 73 Number of months to pay off loan Total Interest Paid Interest Paid / Loan Amount S971.65 19% Monthly Payment Balance Interest Principal New Balance Cumulative interest 1 5.000.00 2 4.942.50 3 4.884.71 4 4.826.64 5 4.768.27 6 4.709.61 7 4.650.66 8 4,591.41 9 4.531.87 10 4.472.03 11 4.411.89 12 4.351.45 13 4.290.71 14 4.229.66 15 4.168.31 16 4.106.65 17 4.044.68 18 3.982.41 19 3.919.82 201 3856 92 Credit Card Repayment 82.50 82.50 82.50 82.50 82.50 82.50 82.50 82.50 82.50 82.50 82.50 82.50 82.50 82.50 82.50 82.50 82.50 82.50 82.50 82 50 + 25.00 24.71 24.42 24.13 23.84 23.55 23.25 22.96 22.66 22.36 22.06 21.76 21.45 21.15 20.84 20.53 20.22 19.91 19.60 1928 57.50 57.79 58.08 58.37 58.66 58.95 59.25 59.54 59.84 60.14 60.44 60.74 61.05 61.35 61.66 61.97 62.28 62.59 62.90 63.22 4,942.50 4,884.71 4,826.64 4,768.27 4,709.61 4,650.66 4,591.41 4,531.87 4.472.03 4,411.89 4,351.45 4,290.71 4,229.66 4.168.31 4,106.65 4,044.68 3.982.41 3,919.82 3,856.92 3793 70 25.00 49.71 74.14 98.27 122.11 145.66 168.91 191.87 214.53 236.89 258.95 280.71 302.16 323.31 344.15 364.68 384.91 404.82 424.42 443 70