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This is the fifth Financial Planning Simulation Capstone Project installment as outlined in Module A located in the Leaming Modules section

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This is the fifth Financial Planning Simulation Capstone Project installment as outlined in Module A located in the Leaming Modules section. It is assumed that you will purchase a vehicle and a home for this installment. Since leasing a vehicle and renting a

home or apartment would also be a viable option. you will still address these topics as part of your responses.

You will complete this assignment based on the key considerations involved in the lease or purchase of a vehicle and key considerations involved in the rental or purchase of housing.

Respond to the following questions:

1. Describe key considerations involved in the lease or purchase of a vehicle by addressing the following:

a. Identify two advantages and two disadvantages of purchasing a vehicle.

b. Identify two advantages and two disadvantages of leasing a vehicle.

c. Describe the process for purchasing a vehicle including the research. selection. purchase. and after-purchase maintenance aspects of this approach.

d. Describe how the process for leasing a vehicle differs from a purchase and define the meaning of terminology that is unique to leasing including the capitalized cost. residual value. and the money factor.

e. As stated in the introductory section for this assignment. you will purchase a vehicle for this project. If you were actually in the market for a new vehicle and not under the requirement to purchase. indicate if you prefer to lease or to purchase and

provide your rationale.

f. Decide on a vehicle to purchase by completing the following and summarizing your results:

i. Visit a manufacturer's website such as Ford Motor Company. an information site such as Cars.com, or the site of your choice. and select a vehicle to purchase.

i. Determine the selling price of your new vehicle choice. multiply x 1.06 to add Michigan sales tax and add $200 for license plate transfer and other fees. This will be the new vehicle cost.

iii. Determine the value of your current vehicle (if you currently have one) by visiting Kelly Blue Book or a similar site.

iv. Subtract the value of your current vehicle and any amount that you would like to include as a down payment from the new vehicle cost. This is your amount to be financed.

v. Determine your monthly payment for the amount to be financed using Bankrate's Auto Loan Calculator. Enter your loan amount and desired term in the appropriate fields. It is acceptable to utilize the current interest provided by the site's

calculator. Next. summarize your findings including the loan interest rate and the monthly loan payment.

2. Describe key considerations involved in the rental or purchase of housing by addressing the following:

a. Identify two advantages and two disadvantages of rented housing.

b. Identify two advantages and two disadvantages of owning a home.

c. As stated in the introductory section for this assignment. you will purchase a home for this project. If you were actually in the market for housing and not under the requirement to purchase. indicate if you prefer to rent or to own your housing and

provide your rationale.

d. Describe the process for purchasing a home including the research. mortgage application. real estate sales contract. and closing aspects.

e. Describe the purpose of closing costs and give three examples. As part of your answer. define the term “points” and indicate why a person would want to pay this amount.

f. Assume that you are able to afford a home with a maximum price of $200.000. Decide on a home price that you feel is right for you and using a site such as Realtor.com or a similar site. select a home to purchase. complete the following. and

summarize your results:

i. Provide a link to your home choice and state why you selected this home.

i. Indicate the amount that you would include as a down payment.

iii, Determine your monthly payment by visiting the Realtor com Mortgage Calculator or the Bankrate Mortgage Calculator. Next, enter your home price and down payment amount into the calculator. It is acceptable to utilize the current interest

provided by the site's calculator. Note: to summarize this part of the question. you can either write about the amount of your Principal and Interest. Homeowner's Insurance. Property Taxes. and Total Payment. or you could include a screen

shot from the site’s calculator results page which contains all of this information.