The Case Approach to Financial Planning Bridging the Gap between Theory and Practice, Fourth Edition (Revised) (4th Edition) Chapter 14, Case 13 The Adora and Jorge Tun Case Answers Please help with calculating PITI and mortgage outstanding balance Mortgage principle Interest 15,932 The house is insured for $141,000 The replacement value of the home equals the current market value Liability coverage is equal to $100,000 Deductible information 1 percent deductible Inflation has been averaging 3 40 percent annually you feel this rate of inflation will continue into the future Money market mutual funds and short term certificates of deposit currently yield 2 25 percent The thirty year fixed rate mortgage interest rate is 7 00 percent The twenty year fixed rate mortgage interest rate is 6 25 percent Closing costs for a refinanced mortgage are 2 percent of the amount borrowed The current interest rate on home equity lines of credit is 7 25 percent The typical draw period is ten years Assets Amount Liabilities Amount Cash $9,250 $15,250 $250 Visa Credit Card $500 MasterCard Credit Card12 $100,000 Mortgage $600 Automobile Loan15 Checking Account Savings Account EE Savings Bonds14 Primary Residence $22,000 $199,000 Other $0 Automobile 1 (new car) $22,000 Automobile 216 $9,000 Furniture and Household Goods $11,000 Personal Property $5,000 401(k) Plan Assets (Adora) $160,000 401(k) Plan Assets (Jorge) $19,000 TOTAL ASSETS TOTAL LIABILITIES NET WORTH Note indicates the need for a calculation by the financial planner Assets Amount Liabilities Amount Cash $9,250 $15,250 $250 Visa Credit Card $500 MasterCard Credit Card12 $100,000 Mortgage $600 Automobile Loan15 Checking Account Savings Account EE Savings Bonds14 Primary Residence $22,000 $199,000 Other $0 Automobile 1 (new car) $22,000 Automobile 216 $9,000 Furniture and Household Goods $11,000 Personal Property $5,000 401(k) Plan Assets (Adora) $160,000 401(k) Plan Assets (Jorge) $19,000 TOTAL ASSETS TOTAL LIABILITIES NET WORTH Note indicates the need for a calculation by the financial planner

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The Case Approach to Financial Planning: Bridging the Gap between Theory and Practice, Fourth Edition (Revised) (4th Edition): Chapter 14, Case 13 The Adora and

The Case Approach to Financial Planning: Bridging the Gap between Theory and Practice, Fourth Edition (Revised) (4th Edition): Chapter 14, Case 13 The Adora and Jorge Tun Case Answers. Please help with calculating PITI and mortgage outstanding balance. Mortgage principle & Interest: 15,932 The house is insured for $141,000. The replacement value of the home equals the current market value Liability coverage is equal to $100,000. Deductible information: 1 percent deductible. Inflation has been averaging 3.40 percent annually; you feel this rate of inflation will continue into the future. Money market mutual funds and short-term certificates of deposit currently yield 2.25 percent. The thirty-year fixed rate mortgage interest rate is 7.00 percent. The twenty-year fixed rate mortgage interest rate is 6.25 percent. Closing costs for a refinanced mortgage are 2 percent of the amount borrowed. The current interest rate on home equity lines of credit is 7.25 percent. The typical draw period is ten years.

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Assets Amount Liabilities Amount Cash $9,250 $15,250 $250 Visa Credit Card" $500 MasterCard Credit Card12 $100,000 Mortgage $600 Automobile Loan15 Checking Account Savings Account EE Savings Bonds14 Primary Residence ??? $22,000 $199,000 Other $0 Automobile #1 (new car) $22,000 Automobile #216 $9,000 Furniture and Household Goods $11,000 Personal Property $5,000 401(k) Plan Assets (Adora) $160,000 401(k) Plan Assets (Jorge) $19,000 TOTAL ASSETS ??? TOTAL LIABILITIES NET WORTH Note: ??? indicates the need for a calculation by the financial planner. ??? ??? Assets Amount Liabilities Amount Cash $9,250 $15,250 $250 Visa Credit Card" $500 MasterCard Credit Card12 $100,000 Mortgage $600 Automobile Loan15 Checking Account Savings Account EE Savings Bonds14 Primary Residence ??? $22,000 $199,000 Other $0 Automobile #1 (new car) $22,000 Automobile #216 $9,000 Furniture and Household Goods $11,000 Personal Property $5,000 401(k) Plan Assets (Adora) $160,000 401(k) Plan Assets (Jorge) $19,000 TOTAL ASSETS ??? TOTAL LIABILITIES NET WORTH Note: ??? indicates the need for a calculation by the financial planner