Power Pay Exercise

This assignment is an exercise in getting familiar with the website PowerPay.org, an excellent resource for developing debt elimination plans and contains many other personal finance tools.

Please go to PowerPay.org and create a free account.

Use the following scenario to enter data into Power Pay and answer questions about the results Power Pay calculates. Upload your completed work to Canvas.

Carla has come in for an appointment and wants to know some different plans for paying off debt. After getting the details on her situation and working through her monthly budget, you realize she has just enough money to pay her debts and afford living expenses, but she is one emergency away from financial ruin. She has no additional savings except for a 401K which she doesnt want to touch.

Enter the following information into Power Pay and show her the differences between various payment strategies. Her debts are as follows:

Credit Card	Balance	Payment	Interest Rate
AMEX	$4,300.00	$95.55	19.3%
Discover	$5,150.00	$132.50	17.5%
Visa	$3,190.00	$100.00	24.59%
Walmart	$1,320.00	$ 60.00	15.79%
CapitalOne	$2,200.00	$80.00	21.89%

1. Without Power Payments, what is the (3pts)

Total Paid	25240.45
Total Interest	9080.45
Payoff Time	6.9years
Time Reduction	N/A
Amount Saved	N/A

2. With Power Payments and Highest Interest First selected, what is the: (3pts)

Total Paid	24108.28
Total Interest	7948.28
Payoff Time	4.4years
Time Reduction	2.5years
Amount Saved	1132.17

3. With Power Payments, targeting the Lowest Balance First, what is the: (2pts)

Total Paid	24116.44
Total Interest	7956.44
Payoff Time	4.4years
Time Reduction	2.5years
Amount Saved	1124.01

4. Suppose Carla admits that instead of paying strictly the minimum payment (the amounts listed in the instructions), she actually pays $10 more than the minimum payment of each debt. This means, her minimum payments are actually: $85.55, $122.50, $90.00, $50.00, and $70.00 (each payment minus $10).

-If you: 1) change the payment values to the real minimums, 2) use the Extra Payments feature to create a monthly recurring $50 extra payment beginning in the month of March 2017, and 3) use power payments with Highest interest selected then

-How much interest does she end up paying? (6pts)

I want to know how much interest does she end up paying