Applied Mathematics 20. Independent Living Project

Transcription

1 Applied Mathematics 20 Independent Living Project

2 Part A (Calculation of Net Pay) Determine a job that you could get right out of high school. (Doesn t require more than two years of training) Determine the starting monthly and yearly gross pay for this job. Refer to for information on careers. (check occupational profiles) If the average wage is use it do determine your calculations Provide a brief summary of your chosen career. (may be copied and pasted from the job description) Determine an RRSP Deduction you can afford to make monthly. make an RRSP deduction of your own choosing (minimum $50.00 / month) From your Monthly Gross income determine the amount of money deducted for Federal Income Tax using the Payroll Deductions Online Calculator tax form at Provide a printout that determines your net pay after deductions

3 Part B (Investing for the future) Assume your RRSP payments (from part A) are made monthly for 30 yrs Your financial Planner has you three options where you can invest you money. Option 1. GIC investment that will earn an average rate of return of 5.25% / a compounded monthly. Option 2. Mutual fund investment that typically earns an average rate of return of 8.25% / a compounded semi annually. Option 3. A single stock market investment that has earned an average rate of return of 11.75% / a compounded annually. Create an investment portfolio for yourself based on the three options. Decide how much to invest in each option and calculate the total return at the end of 30 yrs. (Show the TVM Solver values entered into the calculator) Discuss the level of risk associated with your investment plan. What % of your investments are made at each risk level. What other information might you want before investing in these options? Option 1. No Risk the investment is guaranteed. Option 2. Medium Risk. Investment is based on the stock market but is spread out over many companies. Option 3. High Risk. All money in invested in a single company.

4 Part C (Housing Costs) Find a home to buy that you can afford Estimate that monthly payments should not be greater than 30% of monthly net pay. (Use newspaper or website) example Calculate the monthly mortgage payment Using the TVM Solver for this home (assume a fixed rate of 5.25% for 25 yrs) Calculate the monthly property tax payment based on a mill rate of 10.5 mills Investigate the price of your monthly payments for Gas/ Electricity/ Water/ Phone / Cable / Internet / etc. (since many change over the year determine the average cost.) Determine the finance charge (total interest paid) for the cost of the mortgage. Prepare a spreadsheet that calculates the total monthly housing costs.

5 Part D (Prepare a Budget) Create a monthly budget. For the following items use your net pay as the total for your budget. For each category break down the individual costs and then calculate the total for each category. Housing and Utilities (From Part C) Food (include a sample weekly grocery list) and Clothing Transportation (buy or lease a car, insurance fuel, etc.) Health and Personal Care Entertainment and Recreation Miscellaneous Savings Using the Totals in each category determine all amounts in dollars and as a % of your net income. (Display results in a pie graph.) If you have a hard time paying your bills, you may add up to 2 room mates. (As long as there is at least one bedroom per person living in the house.) Assume each roommate will pay $600 / month rent. They are expected to pay for their own groceries and any extra long distance phone charges. Monthly Net Expense Category Income (%) Housing & Utilities 27-33% Food & Clothing 20-26% Health & Personal Care 3-5 % Transportation 12-14% Recreation & Education 6-8% Savings 6-10% Miscellaneous 12-18% Explain any choices that deviate from the recommended % How much money is left over for savings or emergencies? Describe any items / costs that you found surprising.

6 Project Marking Rubric Not Done 0 Net Pay Investment Housing Budget Overall Unsatisfactory 1 Incomplete sections with mistakes in Calculations or appropriate use of spreadsheets is not evident A misunderstanding of the problem is evident. Errors in calculations or appropriate use of spreadsheets are not evident. strategies in a manner that lacks clarity. A misunderstanding of the problem is evident. Errors in calculations or appropriate use of spreadsheets are not evident. strategies in a manner that lacks clarity. A misunderstanding of the problem is evident. Errors in calculations and appropriate use of graphs are not evident. strategies in a manner that lacks clarity. The overall project lacks organization and visual appeal. Communication lacks clarity and shows inconsistence in the data. Satisfactory 2 spreadsheets is evident. There may be minor errors or omissions in calculations spreadsheets is evident. strategies in an organised manner that reflects an understanding of the problem spreadsheets is evident. strategies in an organised manner that reflects an understanding of the problem graphs is evident. strategies in an organised manner that reflects an understanding of the problem The overall project shows an organized easy to follow solution to the problem. There is a visual appeal to graphs and charts making the data easy to comprehend. Exceeds Expectations 3 that shows a clear and excellent understanding of the problem. spreadsheets. showing correct calculations. spreadsheets. showing correct calculations. spreadsheets. showing correct calculations. graphs. The overall project shows a thorough understanding of the problem. Data is highly organized and conclusions are well defended. There is exceptional visual appeal that enhances graphs and charts making the data effective in presenting the project.