FINANCIAL MATH PROJECT STUDENT LOAN BUDGETING. Cassandra Mcavoy Bryant & Stratton college Susan dobbins april 2nd, 2015

hypothesis In this project I will be figuring out my student loan payment plan. I will set up a payment plan that will help pay back my student loans faster . I will need my salary amount to figure out my monthly budget. To calculate how much I should pay monthly to pay off my student loans. I will also find my desired monthly payment to pay back the loan faster so I can save in interest. If I can pay back my loans faster in five years rather than ten years I well pay it off faster and cheaper because I wont be paying a lot of interest.

Annual salary On average a Medical Assistant makes $29,370 a year. Though that amount may vary depending on the place you live. I hope that while working at my dream job I can make the most witch can be up to $34,750. Beginning positions usually start at $14.12 but can end up being any where around $22.00/Hr. Gross pay with a 20% tax rate: $23,496 $29,370 $29,370 * .20 - $5,874 $5,874 $23,496 Monthly Salary: $1,958.00 U.S. Bureau of Labor Statistics. (2014). Medical Assistants. Occupational Outlook Handbook. Retrieved from: http://www.bls.gov/ooh/healthcare/medical-assistants.htm#tab-5

Monthly Budget Housing: $400.00 Food: $300.00 $400 $1,958 Utilities: $100.00 Cell Phone: $100.00 Cable: $50.00 Insurance: $150.00 Miscellaneous(Clothes, Gas, Credit Cards Etc.): $300.00 Left over(Play Money): $558.00 $400 $1,958 $300 - $1,400 $100 $558 $100 $50 $150 $300 $1400

Student loans The repayment process for your federal student loans can go a long way toward building a solid financial foundation. Paying off your loan sooner rather that later saves you money on interest and in the long run will help you to save money by not having that extra loan to pay.  A loan repayment schedule must be put in place by the lender that states when your first payment is due, the number and frequency of payments, and the amount of each payment to start paying back loans. If loans are not paid back over a period of time the loans will go to default and that will hurt your credit. If loans go into default, the loans lender can take legal action that will require payment through garnishment of wages and withholding of tax refunds.

$3,500 X 5 $17,500 Principal 5 Semesters Subsidized Loan $3,500

Monthly payment – future value & interest Using the formula 𝑀=𝑃[ 𝑟 𝑛 (1+ 𝑟 𝑛 )𝑛𝑡 1+ 𝑟 𝑛 𝑛𝑡−1 ] Monthly Payment $176.02 Future Value $21,122.40 Interest $3,622.40

Desired Monthly payment In 5 years Monthly Payment $321.18 Future Value $19,270.80 Interest $1,770.80

Desired monthly payment In 7 years Monthly Payment $238.08 Future Value $19,998.55 Interest $2,498.55

Desired monthly payments cont. The difference between the calculated monthly payments are in ten years, I would pay $176.02 every month. I would be paying an interest of $3,622.40 In 5 years I will be paying $321.18 a month, but the interest goes down to $1,770.80 In 7 years I will be paying $238.08 a month with an interest of $2,498.55. Which is way better than paying your loans off in ten years!

Desired monthly payment Cont. My desired monthly payment would be to pay of my student loans back in 5 years. This way I would be paying $321.18 a month and this would lower my interest to $1,770.80 making it better for me in the long run. Paying this cost monthly would still leave me with $236.82 leftover to play with. That is plenty enough for me to have leftover to survive.

References U.S. Bureau of Labor Statistics. (2014). Medical Assistants. Occupational Outlook Handbook. Retrieved from: http://www.bls.gov/ooh/healthcare/medical-assistants.htm#tab-5