Solution
Rochak answered on
Mar 05 2023
Financial Condition
John, who is 30 years old and works as a software engineer. John's net worth is calculated by subtracting his liabilities from his assets. John has $150,000 in assets, which includes $50,000 in savings, $80,000 in retirement accounts, and $20,000 in equity in his home. John also has $50,000 in student loan debt. Therefore, John's net worth is $100,000.
John's income is $100,000 per year. He receives a salary of $80,000 and an additional $20,000 in bonuses and stock options. John's gross monthly income is $8,333.33.
John's monthly expenses include $1,500 for rent, $200 for utilities, $400 for groceries, $300 for dining out and entertainment, $150 for transportation, $100 for insurance, and $200 for miscellaneous expenses such as clothing and personal care. His total monthly expenses amount to $2,850.
John's debt-to-income ratio, which is the amount of debt he has compared to his income, is 50%. This means that half of his income goes towards paying off his student loans. This ratio is high, and John may want to consider making additional payments towards his student loans to reduce his debt burden.
John's savings rate is 15%. This means that he saves $12,500 per year or $1,041.67 per month. He contributes 10% of his salary to his employer's 401(k) plan, which has a match of up to 5%. John is on track to meet his retirement goals, as he is saving enough to maintain his cu
ent lifestyle in...