What is the residual income that is available to Mr. Heffernan after satisfying the needs for his financial plan?

Time Value of Money Mini-Project JOB DUTE Mr. Donald Heffernan, a 35-year-old account manager At Wells Fargo has gross annual income after all deductibles of $85,000. Mrs. Heffernan quit her job at Walmart to take care of their twin kids, Luke and Christine. So, Mr. Heffernan is the only income earner at his household. HORA CAS Swww. CERITA PROPES HOUSE Mr. Heffernan is filing income using the following "Married filing jointly" tax rate schedule. Tax rate Taxable income over $0 18,451 74,901 151,201 230,451 411,501 464,851 Not over 18,450 74.900 151,200 230,450 411,500 464,850 10% 15% 25% 28% 33% 35% 39.6% 1- Mr. Heffernan's net annual income is: $72,162.50 2- Mr. Heffernan's net monthly income is: $6,013.54 3- Mrs. Heffernan just won the state sweepstake. She got two options to get her prize. (1) To receive $250,000 today. Or (2) to receive a monthly payment of $2000 for 25 years period. If Mrs. Heffernan appropriate discount rate is 6%. Which option should Mrs. Heffernan go with? Mrs. Heffernan should select option 2 as the present value of monthly payments is higher than the today's prize value. Note: if Mrs. Heffernan choose to go with option 1, she will invest the $250,000 at 6% to generate monthly income for the 25 years period. 4- The Heffernan's total monthly income is: $8,013.54 Once Mr. Heffernan calculates his net monthly income from all sources, he decided to make a personal financial plan. Mr. Heffernan's financial targets include paying his student loan, paying the balance of credit cards, saving for retirement, and saving for his son's and daughter's college. 5- MR. Heffernan thinks it is finally time to start taking care of his student loan that has been outstanding for a while now. He has $120,000 outstanding balance. He wants to make monthly payments to pay off that balance to in 10 years. If the interest rate on this outstanding balance is 3%, how much should Mr. Heffernan pay each month? The monthly payment should be $1,158.73. 6- Mr. Heffernan has an outstanding credit card balance of $20,000 with APR of 12%. If he is going to keep paying the minimum monthly payment of $250. How long will it take Mr. Heffernan to pay off the entire credit balance? It would take Mr. Heffernan 162 months (13.5 years) to payoff the entire credit balance. 7- Mr. Heffernan wants to save for his retirement. He is thinking of saving $1,250 a month in a 401K account that pays an annual rate of 3.5%. How much will he have in his retirement account when he turns 65? Mr. Heffernan will have $794,262.00 in his retirement account when he turns 65 yrs. old. 8- Mr. Heffernan wants to give his twin son and daughter $100,000 each when they turn 18. Currently they are 3 years old. How much does Mr. Heffernan need to save on a monthly basis? Assuming that he could invest his savings at a portfolio that earns 4% per year. Mr. Heffernan needs to save $8,006.88 on a monthly basis. 9- If Mr. Heffernan can actually stick to his financial plan, how long could his retirement savings afford for his living. Assuming that his estimated annual expenses after retirements is $48000, and that his retirement savings are going to be saved in a bank accounts that earns 2%. Mr. Heffernan's retirement savings could take him up to 20.3 years