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Percy and Penny Payne, recently married, are feeling the financial weight of homeownership, and have come to see you about applying for a car loan
Percy and Penny Payne, recently married, are feeling the financial weight of homeownership, and have come to see you about applying for a car loan of $20,000. They are interested in purchasing a two-year-old Nissan. Up to this point, the two have been sharing a car, but it is getting challenging since Percy has been having to do more out-of-town on-site location work. Penny needs her own vehicle. As existing clients of the bank, their records indicate an outstanding car loan on their older vehicle, the four-year-old Toyota Camry valued at about $18,000. Percy is employed at Gas Co, where he has been working for five years, while Penny has been with CDC Insurance Company for three years. Both receive their salaries bi-weekly and have provided their most recent pay stubs for your examination. Questions to answer: 1. Using the paystubs provided that are in your team's file: Calculate both Percy and Penny's monthly income Percy's monthly income is $8,615 Penny's monthly income is $3,900 During your conversation with the clients, they provide the following information to you: 4. Calculate the payment of the loan of $20,000 interest Prime +2.0% and the term is 4 years -48 months. (assume prime is 7.2% ) 5. Calculate GDS and TDS (before the new loan payment and after including the new loan payment). Assume the following: heating is $150, taxes are $250, and condo fees are $250. Show your work here. TDS before the new loan payment TDS with the new loan payment 6. Are these ratios acceptable? Why or why not
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