BA 620 Assignment III
(Covers concepts from Week 5 and Week 6)
Submit your Word and Excel files on Moodle by 11:59 PM on the due date. All work
must be completed individually.
Note: Show all keystrokes or formulas in your calculation to receive full credit. Final answers without any
keystrokes or formula or calculation will receive 0 credit.
Kristen and Marcus Hampton live in Louisville, KY. Marcus has a base salary of $65,000
per year from his position as a transportation supervisor at the University of Louisville. In
addition to his day job, he started a (part-time) senior transportation business for the last 2 years,
which increases his annual gross income by $10,000; he plans on expanding his business and
possibly working full-time in the future. Kristen recently (May of 2024) graduated with an
Elementary Education degree from Campbellsville University and works as a teacher at their
local elementary school. She makes $42,000 a year. She received a grant to pay for part of her
schooling but still needed to take an additional student loan to pay for her undergraduate degree
fully. Her first student loan payment will be on December 1, 2024.
They own their home, currently assessed for property taxes at $295,000, and aggregate property
taxes run 3.2% of taxable value annually. Their original mortgage, taken out exactly two years
ago, was for $220,000 financed for 30 years at 9.8%. Their monthly mortgage payment
including principal and interest is ________, and their current mortgage balance is $_______.
The annual cost of their homeowner’s insurance is $1,920.
Marcus drives a 2020 Chrysler Pacifica with a blue book value of $22,000, which he uses for his
business. His initial auto loan was $39,000, financed for 6 years at 12% through their local bank.
His monthly payment is $______, and they have just made their 48th payment at the beginning of
this month. Marcus would like to fully pay off the car while they have some discretionary
savings available before the new year. His current payoff amount as of December 2024 is
_______________.
Kristen drives a 2016 Kia Sorento worth $13,500 (fully paid for). The annual vehicle insurance
for both cars is $1,499. Of course, they are waiting for their auto insurance bill to skyrocket next
year. They have no other debt obligations.
In September, Kristen’s favorite aunt passed away and left her $25,000. They are coming to you
now about how to invest the funds (cash and debt management) and questions regarding
expanding their transportation business.
The Hampton’s goals are:
1. They would like to maintain 3 months of their total outflows (including taxes, savings
outflows, and all expenses); they would like your recommendations on how they should
Copyright of Dr. Dava Dorjsuren 1
, invest their funds if they would like the funds to be fairly liquid in case of emergencies.
Their current monthly non-discretionary expense is $4,500. Please cite the sources used
in your recommendation.
2. They would like to pay off their debt with the exception of their home mortgage. In
addition, they need help with Kristen’s student loan. They would like to know her
monthly payment and how much she currently owes, including her 6-month grace period
since she graduated college. Please include a recommendation that includes enough
information so that Kristen and Marcus will know exactly how to follow the plan to meet
these goals.
Additional Information:
o They bank with the Community Trust Bank (CTB), where they have their
checking, savings, and money market accounts.
o Student loan balance as of May 2024: $31,000
Current student loan balance as of December 1, 2024: ________
Length of the Loan: 10 Years
Estimated Monthly Payment: ____________
Interest: 5.2%
o Auto Loan Details:
FMV of the vehicle: $22,000
Length of the loan: 6 years
Monthly payment: __________
They have just made their 24th payment on November 15, 2024.
Debt payoff amount: ___________
Student Loan:
a. What is Kristen’s current balance on her student loan as of December 2024?
b. What is Kristen’s monthly student loan payment starting December 2024?
Auto Loan:
c. What is Marcus’s (their) monthly auto payment?
d. Approximately how much interest did they pay after their 48th payment?
e. Approximately how much of their payments have been applied to their outstanding
principal after their 48th payment?
Copyright of Dr. Dava Dorjsuren 2
(Covers concepts from Week 5 and Week 6)
Submit your Word and Excel files on Moodle by 11:59 PM on the due date. All work
must be completed individually.
Note: Show all keystrokes or formulas in your calculation to receive full credit. Final answers without any
keystrokes or formula or calculation will receive 0 credit.
Kristen and Marcus Hampton live in Louisville, KY. Marcus has a base salary of $65,000
per year from his position as a transportation supervisor at the University of Louisville. In
addition to his day job, he started a (part-time) senior transportation business for the last 2 years,
which increases his annual gross income by $10,000; he plans on expanding his business and
possibly working full-time in the future. Kristen recently (May of 2024) graduated with an
Elementary Education degree from Campbellsville University and works as a teacher at their
local elementary school. She makes $42,000 a year. She received a grant to pay for part of her
schooling but still needed to take an additional student loan to pay for her undergraduate degree
fully. Her first student loan payment will be on December 1, 2024.
They own their home, currently assessed for property taxes at $295,000, and aggregate property
taxes run 3.2% of taxable value annually. Their original mortgage, taken out exactly two years
ago, was for $220,000 financed for 30 years at 9.8%. Their monthly mortgage payment
including principal and interest is ________, and their current mortgage balance is $_______.
The annual cost of their homeowner’s insurance is $1,920.
Marcus drives a 2020 Chrysler Pacifica with a blue book value of $22,000, which he uses for his
business. His initial auto loan was $39,000, financed for 6 years at 12% through their local bank.
His monthly payment is $______, and they have just made their 48th payment at the beginning of
this month. Marcus would like to fully pay off the car while they have some discretionary
savings available before the new year. His current payoff amount as of December 2024 is
_______________.
Kristen drives a 2016 Kia Sorento worth $13,500 (fully paid for). The annual vehicle insurance
for both cars is $1,499. Of course, they are waiting for their auto insurance bill to skyrocket next
year. They have no other debt obligations.
In September, Kristen’s favorite aunt passed away and left her $25,000. They are coming to you
now about how to invest the funds (cash and debt management) and questions regarding
expanding their transportation business.
The Hampton’s goals are:
1. They would like to maintain 3 months of their total outflows (including taxes, savings
outflows, and all expenses); they would like your recommendations on how they should
Copyright of Dr. Dava Dorjsuren 1
, invest their funds if they would like the funds to be fairly liquid in case of emergencies.
Their current monthly non-discretionary expense is $4,500. Please cite the sources used
in your recommendation.
2. They would like to pay off their debt with the exception of their home mortgage. In
addition, they need help with Kristen’s student loan. They would like to know her
monthly payment and how much she currently owes, including her 6-month grace period
since she graduated college. Please include a recommendation that includes enough
information so that Kristen and Marcus will know exactly how to follow the plan to meet
these goals.
Additional Information:
o They bank with the Community Trust Bank (CTB), where they have their
checking, savings, and money market accounts.
o Student loan balance as of May 2024: $31,000
Current student loan balance as of December 1, 2024: ________
Length of the Loan: 10 Years
Estimated Monthly Payment: ____________
Interest: 5.2%
o Auto Loan Details:
FMV of the vehicle: $22,000
Length of the loan: 6 years
Monthly payment: __________
They have just made their 24th payment on November 15, 2024.
Debt payoff amount: ___________
Student Loan:
a. What is Kristen’s current balance on her student loan as of December 2024?
b. What is Kristen’s monthly student loan payment starting December 2024?
Auto Loan:
c. What is Marcus’s (their) monthly auto payment?
d. Approximately how much interest did they pay after their 48th payment?
e. Approximately how much of their payments have been applied to their outstanding
principal after their 48th payment?
Copyright of Dr. Dava Dorjsuren 2
