Prepare an annual (fiscal year from July to June) budget for an imaginary De Anza student. The student will work full time (160 hours per month) during July, August & September. The student can work half time (80 hours per month) during the other 9 months of the school year.

The student will have $1,000 in cash in the bank on July 1 and earns interest on the cash balance at 5% per year. Interest income should be calculated each month by taking the monthly interest rate and multiplying it by the beginning of month cash balance.

The student has a credit card with a $5,000 line of credit. Interest expense on the unpaid balance is 20% per year and must be paid monthly. I recommend NOT using your credit card to smooth out the cash flowsthe interest rate is too expensive. (Just like real life.) The cash balance cannot go negative so increase your hourly wage rate if you start to run out of money.

Plot in the expenses that will be incurred during the year. Include all expenses you can imagine including payroll taxes, income taxes, tuition and books, food, rent, travel, transportation, insurance, fun, clothes, phone, utilities, etc. Calculate the hourly rate that must be earned to live for the year. Calculate annual totals and the final cash balance on June 30.

Name of Imaginary Student:

____________________________________

Interest income rate per year:

5.000%

Interest income rate per month:

0.417%

Gross Salary per hour:

Payroll Tax rate:

Income Tax rate:

Hours per month:

TOTAL For

JUL

AUG

SEP

OCT

NOV

DEC

JAN

FEB

MAR

APR

MAY

JUN

YEAR

Cash Beginning of Month (BOM)

$ 1,000

Cash inflows:

Job

Interest income

Borrow on credit card.

Total cash inflows:

Total cash available:

Cash outflows:

Total cash ouflows:

Cash End of Month (EOM)