ECONOMICS SEMESTER PROJECT

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1 ECONOMICS SEMESTER PROJECT It is time to take some of what you have learned and combine it into a Real Life Economics Project. This has multiple parts and will count as a project grade. Each part needs to be done to the best of your ability and all of this will be turned in together. When the project is turned in, it needs to be neat, readable and bound together in some fashion. It needs to be typed and corrected for spelling. This is an individual project. This project is due on at the beginning of class. It will not be accepted late. If you have any questions or concerns you need to see me ASAP this is a significant part of your grade and should not be done at the last minute. You need to follow these directions and use your class notes for additional help. REAL LIFE Part I Research Paper Use the following website, www. completing the Career Key quiz under the career planning tab. Choose a career/occupation from your combined results. You need to take your findings and write a paper describing why that job would be best for you. After telling why that job would be best for you, you then need to answer a few basic questions. 1. What is the monthly and yearly pay? 2. Is there a difference in the beginning pay and someone with experience? 3. Is there a difference in pay depending on where you live? Explain 4. What are the job requirements? (What do you have to do to get this job?) 5. What are the duties? (What do you actually have to do on this job?) 6. What is the job outlook? (Will there be a need for this job in the future?) If the job the computer chooses for you is something you absolutely DO NOT want to do you may choose another profession If you clear it with me first. Even if you choose something else it has to be realistic. You cannot choose to be a professional football or baseball player. You still must answer the questions above when you write your paper. (Hint-This needs to be a wellwritten typed paper with at least 3 paragraphs.) Part II Figuring Taxes The very first thing you need to do is determine how much money you will actually have to spend to buy your necessities. The federal and state governments automatically take money out of your check, taxes. Using the correct percentage below, figure the amounts of taxes withheld from your check by the federal government and then subtract from your gross income. How to calculate: EX: If you make $50,000 annually as a single person, you would not be charged 25% of your total income. You would be charged 10% of $8,925, 15% from $8,925 to $36,250, and 25% of income from $36,250 to $50,000. Part 1= 10% of $8,925 = Part 2 = = % of = Part 3= = % of = Total taxes for year= = $

2 2013 Federal Tax Rates Rate Single Filers Married Joint Filers Head of Household Filers 10% $0 to $8,925 $0 to $17,850 $0 to $12,750 15% $8,925 to $36,250 $17,850 to $72,500 $12,750 to $48,600 25% $36,250 to $87,850 $72,500 to $146,400 $48,600 to $125,450 28% $87,850 to $183,250 $146,400 to $223,050 $125,450 to $203,150 33% $183,250 to $398,350 $223,050 to $398,350 $203,150 to $398, % $400,000 and up $450,000 and up $425,000 and up Part III Finding Housing Now that you roughly know how much you have to spend each month, you need to choose a place to live. This needs to be something you can afford. An affordable home is 2 to 3 times your annual gross income or monthly payments of up to 25% of your net monthly income. To do this, you need to use internet real estate sites such as Homes.com, realtor.com or zillow.com. you could also find your home in a real estate magazine. You need to either cut out the ad or copy the information and pictures from the website. After you have done this you will need to look at rates on mortgages on websites for a 15-year and 30-year fixed loan. One of the best sites to use is bankrate.com. (I need to know the websites you visited. Be sure to list their names next to the loan amount. A chart with name and each amount would be nice.) 1. What is the interest rate and monthly payment on a conventional 15-year home loan? 2. What is the interest rate and monthly payment on a conventional 30-year home loan? After you have found out the interest rate you will then do the math. Identify which mortgage payment will work best for you. I am giving you $5,000 as a down payment. A general rule is that you can afford a house 3 times your gross annual pay. Three times your gross pay is the maximum you should go, it is always a good idea to shoot under that number. Also remember that if you take a longer loan, you will end up paying more interest over time. Figure out the amount of your monthly income this will take so that you can put it in your budget. Part IV Finding Transportation Now that you have chosen a place to live, you need to have a form of transportation. Using the internet, local newspapers, or car selling magazines you will choose a car/truck. Remember this has to be something you can afford. You need to either cut out the ad or copy the information and pictures from the website. Then you will visit websites and ask the following questions: (Again, I need to know the banks that you got the information from. Again bankrate.com is a good site) 1. What is the interest rate and monthly payment on a 3-year car loan? 2. What is the interest rate and monthly payment on a 4-year car loan? 3. What is the interest rate and monthly payment on a 5-year car loan?

3 They will probably ask you if it is a new or used car. The answer will depend on what you have chosen. Again, when you get the interest rate do the math. Figure the monthly car payments 3 times, once for 3 years, 4 years and 5 years. Identify which loan amount works best for you and your income. Then when you get those amounts, subtract each form your monthly salary you have left AFTER the house payment has been subtracted. After you have done all of this you now have the amount of money you have to live on each month. REMEMBER, you will have to pay the rest of your bills, (Electricity, Gas, Water, Cable, Groceries, Insurance, Etc.) out of this amount. CAN YOU AFFORD THEM? And will you have any discretionary income left? Good Luck Making Ends Meet! Part V- Education (honors) An additional cost that you have to consider is the cost of paying for your education. School loans can be very expensive depending on the school you choose to attend and the years you go to school. Click on the college planning tab and find schools that offer the degree you are seeking for you to work in your desired career. Find the average amount of debt students owe after attending the college of your choice, or calculate the cost of attending the school based off average annual tuition fees. Once you know the total for the years you would attend, go to the financial aid tab, and then click on loan tab, and once there click on the loan repayment calculator. There you can calculate your monthly payments for students loans based off of the amount it would cost you to go to school. Show me what your monthly payment would be for the school of your choice

4 Name Date Georgia Career Information System CAREER Directions: Fill in the information in the following areas concerning a career you are interested in researching. Continue on the back of this page if you run out of space. This is a guided note sheet you can use to write your research paper 1. Work activities 2. Aptitudes 3. Physical Demands 4. Work Setting 5. Wages: Entry Level Average 6. Employment Outlook 7. Tools 8. Preparation 9. Advance Opportunities 10. Related Occupations 11. Related Information 12. Related Educational Programs 13. Bibliography

5 Gross Monthly Income Taxes Net Monthly Income Expenses Monthly Budget Housing up to 35% Rent/Mortgage Utilities Telephone Furnishing Transportation up to 20% Car Payment Insurance Gasoline Maintenance License Tag/Taxes Savings 10-15% Other Debt up to 10% All Other Expenses up to 20% Food Clothing Medical Entertainment Miscellaneous Total Total

6 SCENARIOS Write your response as to how you would need to adjust your budget according to the situation. Explain in a few sentences how each would impact your budgeting decisions and why. 1. There is an understanding that a third of the United States petroleum comes from Venezuela. The petroleum industry is state controlled in Venezuela. Many citizens within the South American country are revolting against their government, particularly its practices of giving favorable trade status to the United States. 2. The United States elects a new President whose agenda is implementing major cuts in taxes along with massive spending increases in infrastructure. 3. You just found out you and your spouse are having twins. 4. The United States has placed a trade barrier on vegetables from Europe.

7 Grading Research Paper (Typed and completed) Taxes & Budget (Mathematically correct) House Information (15yr/30yr mortgage; pictures and description included) Car Information (3/4/5yr loans; pictures and description included) Education (Loan amount for all years, and monthly payment) 20 pts 20 pts 15 pts 15 pts 10 pts Scenarios 20 pts (Typed, answered, and explained in sentences) TOTAL 100 pts