Assignment:

General maths

Izzy Crouch

21/04/23
Table of Contents
1. Formulate:................................................................................2
1.1 Introduction:.......................................................................................................... 2
1.2 Assumptions:........................................................................................................ 2
1.3 Observations:........................................................................................................ 2
2. Solve:.......................................................................................3
2.1 Net income:........................................................................................................... 3
2.2 Car:....................................................................................................................... 3
2.3 Fuel Cost:.............................................................................................................. 4
2.4 Rent:..................................................................................................................... 4
2.5 Travel expenses:................................................................................................... 4
2.6 2027 Inflation:....................................................................................................... 5
2.7 Budget:................................................................................................................. 5
3. Evaluation:................................................................................6
3.1 Strengths:............................................................................................................. 6
3.2 Limitations:........................................................................................................... 6
3.3 Improvements:...................................................................................................... 6
4. Conclusion:...............................................................................7
Appendices:....................................................................................8
 1. Formulate:
1.1 Introduction:
This report will discuss the financial requirements of a young adult planning
an overseas holiday to a destination of their choice two years after
completing high school. Neville is an electrical apprentice earning $15.38 per
hour. The report will also discuss the recommended repayments for a car
loan, weekly expenses such as rent, bills, mobile data, Netflix, car insurance,
food, car registration and fuel. Neville needs to purchase a car between
12,000 and $15,000 with 90% of the cars value requiring financing. A weekly
budget would be created using a spreadsheet to analyse his expenses and
savings to determine, if Neville would be able to afford his holiday and
expenses related to his car.

1.2 Assumptions:
- Neville is an Australian citizen, this is important as you must be an
Australian citizen or permanent resident to be eligible for a car loan
(AutoCarLoans.com.au, 2022).
- Neville has a valid Australian passport, this is important as Neville will not
be able to travel on his overseas holiday without one and he is fully
vaccinated.
- Neville only has one insurance policy, this is important as having more
than one insurance policy will alter the price of the car insurance policy.
- Assume that Neville works 40 hours a week and doesn’t work overtime,
this is important for the calculations of his net income and will determine
his weekly budget.
- Interest rates for the loan are fixed, therefore Neville pays the same
amount every payment.

1.3 Observations:
- it is observed that at least 90% of Neville’s car will need financing from a
bank or building society and he only saved 10% deposit.
- It is observed that Neville’s car costs $12,888.
- It is observed that Neville will be away for 12 days in January 2028
- It is observed that Neville is an Australian resident he will have to pay tax.
- Neville will have to pay for insurance and registration on his car.
- Neville lives in a share house with 2 other people and all bills and rent are
shared equally along 3 people.
 2. Solve:
2.1 Net income:
Neville commences his apprenticeship as an electrician in 2026. His net income
is $29430.10 per annum after tax (see appendix 1). Neville makes $615.20 per
week, meaning his gross annual income comes to $31,990.40.
Weekly gross income = $15.38 x 40
= $615,20
Annual gross income = $615.20 x 52
= $31,990.40
Neville’s net income was calculated to be $29430.10 per annum, $2452.51 per
month and $565.95 per week (see appendix 1)

2.2 Car:
The car selected is a 2012 ford fiesta LX WT auto, this car was found on the site
carsales.com. The selected hotel is Fiji Gateway Hotel, found on the site Expedia
and the selected property is a 3-bedroom house that costs $545 a week for rent,
this house was found on the site realestate.com.
The car Neville selected was a 2012 Ford Fiesta LX WT auto (appendix 2). this
car was selected for its fuel efficiency and reliability. This car has only 54,824km
meaning it is relatively new and will be more reliable than a car with a larger
odometer. This car was found on the website carsales.com.
The Queensland government's online service for the transport department was
used to calculate vehicle registration. The entire cost of yearly car registration
was $793 annually (see appendix 3)
Car insurance was calculated using the RACQ website, it was calculated to come
to a total of $215 monthly (appendix 4)
The borrowed amount is 90% of $12,880 this was calculated below:
borrowed amount = 90% of $12,880
= 0.9 x 12,880
= $11,592
Nevilles weekly repayments were calculated using CommBank’s personal loan
repayment calculator, Neville needs to borrow a total amount of $11,592. the
cost of the car loan was found to be $55 weekly for 5 years (see appendix 5).
The interest rate was calculated at 8.50% p.a. Research showed that the average
interest rate for a used car loan was 6.46% p.a. the interest rate was increased
by 2% to accommodate for any issues such as an increase in price due to
Nevilles age.
2.3 Fuel Cost:
Neville drives approximately 200km a week and the cars fuel efficiency is
6.1L/100 kilometers, The website Calculator.net was used to calculate the fuel
cost per week, the fuel cost calculator can estimate fuel cost according to the distance
of a trip, the fuel efficiency of the car, and the price of gas using various units. Research
showed that the average fuel cost for unleaded petrol was $1.97 per litre in Brisbane. The
cars fuel efficiency was shown to be 6.1L/100kmh. this information was entered into the
calculator resulting in the fuel price per week to be around $24.03 a week (appendix 6).
Neville is required to service his car annually, he was quoted $209 by mycar Tyre & Auto
Capalaba.

2.4 Rent:
Neville is in need of a property to rent. Neville has selected 3-bedroom property in Alexandra
hills with 2 others in order to save money. This house has 3 bedrooms, one bathroom and 1
car space. The original rent of this property was $545 per week (appendix 7) but after
splitting the rent between 3 people, the cost is $181.70 weekly per person (appendix 8)

2.5 Travel expenses:

Neville has chosen to travel to Fiji for 12 days from the 23 rd of January to the 5th
of February, staying at the Fiji Gateway hotel (appendix 9). the gateway hotel is
located in Nadi, Fiji and is rated 8.8/10 on the Expedia.com.au website, with 2
restaurants, 2 pools and full air conditioning it is arguably one of the best deals
for a hotel in Fiji with the price for 12 nights coming to a total of $1,857
(appendix 10). The flights were found on the Fiji airways website, Neville will be
flying economic return for $611.99 (appendix 11). The total of his flights and
hotel come to $2,468.99.
Neville has selected his travel insurance through the site world2cover travel
insurance. Neville has chosen the top coverage with $200 excess which costs a
total of $95.59 (appendix 12)
Neville has chosen to put $2500 aside for spending money on his trip.
Total expenses = 2,468.99 + 95.59 + 2500
= $5,064.58
2.6 2027 Inflation:
It is expected that the inflation rate in 2027 will be 2.83% (appendix 13)

n
A=p ( 1+i ) , whereas P istotal amount , n=number of years∧i=inflation rate
2
A=5064.58(1+0.0283)
¿ $ 5355.30
Weekly budget for holiday = 5355.30 ÷ 52
= $103
 Neville needs to save $5355.30 total for his trip, meaning he will have to save
$103 per week for 1 year to afford his holiday in January 2027.

2.7 Budget:
Neville has to budget weekly in order to cover his weekly expenses, his expenses
were shown in an excel spreadsheet:

The formulas for the spreadsheet can be found in the appendices (appendix 8)
 3. Evaluation:
Neville needs to save $103 per week to be able to afford his holiday. The excel
spreadsheet shows that Nevilles weekly savings comes to $175.69 per week.
After saving $103 for his holiday, Neville will have $72.69 to save for other
expenses, this therefore means that Neville can afford his holiday.

3.1 Strengths:
- Neville saves $72.69 weekly on top of his $103 savings for his holiday,
therefore he can afford his holiday, with some money to spare.
- The budgeting spreadsheet and weekly expenses were calculated through
excel with an implication of different formulae.
- Neville has travel insurance to protect him if something is to happen
on/prior to him being able to go to the holiday.
- Nevilles car repayments are cheaper due to the extended period of time.

3.2 Limitations:
- Due to Nevilles young age, the car insurance fees were more expensive
- Neville has not budgeted for unexpected expenses such as issues with his
car or medical bills, meaning he may not be able to afford his holiday if
another issue arises.
- The inflation calculations were based of predictions, meaning that inflation
may rise further than expected and Neville’s budget may not be able to
accommodate to the increase in price for his holiday.

3.3 Improvements:
- Nevilles car loan repayments are paid over a 3-year period rather than a 5-
year period (appendix 14)
The new budget for Neville including the new quote for his shortened car loan
period can be found below:

4. Conclusion:
This investigation discussed the financial situation and expenses that Neville
faced while planning for an overseas holiday in January 2027. Due to Nevilles
weekly income and expenses being effectively budgeted, Neville was able to
save money with a respectable amount leftover for other savings. Although
Neville has enough money for his holiday, he may struggle with paying for
unexpected expenses such as replacement of car parts or medical issues. If
Neville was to adjust his holiday timing, his flights and accommodation would be
cheaper meaning that he would be able to save easier.
Appendices:

Appendix 1: Neville’s net income after tax

Appendix 2: Neville’s car

Appendix 3: car registration

Appendix 4: car insurance

Appendix 5: car repayments

Appendix 6: fuel cost

Appendix 7: Neville’s house

Appendix 8: weekly expenses

Appendix 9: accommodation
Appendix 10: accommodation/room price

Appendix 11: flights

Appendix 12: Travel Insurance

Appendix 13: inflation

Appendix 14: improved car loan quote