Gordon G

College Budget Questions

1. If I can only work eight months per year, how much do I have to make each month to pay off
the left over amount after taking out a loan?
a. Calculate the needed monthly income. Is this realistic?
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- This income would probably be hard for me to meet. If I made about ten dollars an
hour, I would have to work about 33 hours per week for eight months, which is about a
6.5 hour day. In the summer I could work that long, but summer is only about 3.5
months long. During the school year, I wouldnt be able to get that much work in. The
best strategy to improve my ability to pay off my extra debt would be to work 12
months a year rather than eight. This would allow me to have a lower monthly income
and therefore fewer hours per week.
b. How much must I make if I want to be able to save $ 25.00 every month? Is this a realistic
goal?
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- Id be hard pressed to make my goal of just paying off the left over without adding to it,
so making even more per month probably isnt realistic. That being said, $25 per month
isnt very much in the bigger picture, and saving that much each month could be very
beneficial in the long run. To make another $25 per month, Id only have to work
another quarter of an hour per day. So if I could find a job that would allow me to pay
off the extra $41,726, it would be relatively easy to work a few extra hours each week
and be able to save.
2. I put $ 25.00 every month in to a savings account that is compounded monthly with an
interest rate of 0.04%.
a. How much will I have saved after four years of college?
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- = $ 1,212.50 by the end of four years
b. How many years will it take to save $2000?
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- , or about 6.5 years
3. If I wanted to save $1500 in the same account before I graduate, how much would I have to
put in each month?
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4. I take out a loan for $100,000.00 for 25 years with a 5.5% interest rate
a. What will my monthly payment be?
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b. How much will I pay back in total? How much interest will I pay over the life of the loan?
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5. If I pay an extra $35 per month, how long will it take me to pay off my loan? How much will I
save?
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6. If I wanted my loan payment to account for no more than a quarter of my income after
college, how much would I have to make each month?
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