Coolum state High School

11MAG
Unit 1:
Cars
Report

Name: Louis Greatbatch

Teacher: Ms Ford
Year: 11

Name: Louis Greatbatch Teacher: Ms Ford

 1. Formulate
Introducti on
The aim of this report is to investigate and determine the financial requirements for a
person looking to buy their first car. This will be achieved by producing a personal budget
that is based on the results of my Mathematical research.
I will then ensure they purchase a car that they can afford. I will do this by analysing their
income, expenditure, variable costs, and fixed costs. This will then allow me to create their
weekly budget by using a spreadsheet program. The total amount of money available to
purchase the car will need to include:
- Income from part time job.
- Savings plan.
- Pay rise.
- Investing current savings.
- Percentage discount on car.
Once I have calculated the weekly expenses and budget, personal budget will be used to
determine how much money is available to purchase a car. I will also consider the possibility
of investing savings over a period of time.

Considerati ons
Observati ons:

- Works Friday and Sunday.

- Client received a pay rise of 20% after 3 months of saving.
- Hourly rate on Friday, time, and a half on Sunday.
In order for me to create and plan the client’s personal budget, I will need to assume that:

Assumpti ons:

- The client works 5 hours on Friday and 7 hours on Sunday, with an hourly pay of $21.
- The client also has a saving account that was created for him when they were young,
which holds a total of $4000.
- The client will get a pay rise of 20% after 3 months of the saving process.
- The client will be saving for 6 months.
- The clients Time fame will be up and have not enough money to afford his desired
car, will need to save more money.
- The interest rate that he will invest in is 5%, compound interest.
- Car costs the client will need to conclude consists of:
- tyres($140)

Name: Louis Greatbatch Teacher: Ms Ford

 - maintenance ($99 per month)
- Fuel ($1.35 per litre)
- Registration ($744.45 for 12 months)
- On Sundays, if working overtime, will get paid double.
- The car he is looking to buy is a 2008 Nissan Navara ST-X that will cost $12,250, while
excluding GST.
- The client doesn’t earn enough money to pay tax.

Mathemati cal concepts:

Mathematical concepts that were used in chart below:

Rates of pay This was used to determine how much the

client got per week on his part time job.
Percentage Percentage was used to determine the client’s
20% pay rise.
Working overtime This was used to make the situation more
realistic.
allowance The client got his allowance of $4,000 from his
Parents.
Personal budget This was used to show the clients financial
standpoint to investigate if he can buy the car.
G.S.T This was implemented on the car’s cost. GST is
10% of the total cost. This information was
used to figure out the car’s cost with GST.
Compound interest Used for the client’s investments the formula of
this is:

Technology used:

The technology that was used in the investigation was Microsoft Word, this is for writing
and documenting the investigation, the internet, a spreadsheet program (Microsoft Excel)
used to create, and form budget, and calculations, and finally, a CASIO fx-82AU PLUS 2
calculator to ensure all equations are correct.

Name: Louis Greatbatch Teacher: Ms Ford

 1. Developing the budget
Part ti me job:

The client works a part time job at a local shop. He earns a$21 hourly rate and works 5
hours on Friday, and 8 hours on Sunday. However, after 3 months of saving, the client got a
big, 20% pay rise, allowing him to earn a $25.2 hourly rate, and he also decided to work 3
overtime hours on Saturday nights.
Investments:

The client has been given a total of $4000 from his parents, this money will be invested at a
compound interest rate of 5%. This calculates to an investment of 204.64 per year.
Expenses:

The expenses that were chosen for the client were average expenses for a teenager to have.
All expenses are in Table 1 Below. This ranges from food, and entertainment to rent and
sport expenses.
Table 1:

Budget:

The clients weekly total is only $297.93, and with all of his weekly expenses taken off of it, it
cuts it down to only $50.19 per week.

This will then add up to $652.47 with 3 months of saving all of his ‘spare money’.

However, after 3 months of saving, the client got a 20% pay rise. This can be shown in the
Table below. You can also see that he decided to work 3 hours on Sunday night overtime.
This can be seen in the cart below.
Income:

Table below shows the clients first 3 months of saving, earning $21 per hour.

Name: Louis Greatbatch Teacher: Ms Ford

Table 2:

After 3 months of saving, the client got a 20% pay rise. This can be shown in the Table 3,
located below. You can also see that he decided to work 3 hours on Sunday night overtime.
Table 3:

Overall savings:

The client’s Overall savings for 6 months is $5,396.57. This includes the clients first 3 months
of saving, His 3 months of pay rise savings, and his investments that was made over time.

Maintenance car cost:

The client will need to consider some car costs after buying his car. Some costs may include:

The client will have to pay a total of $4,460.57 per year for car costs.

2. Evaluate
Evaluating the budget
Due to only being able to have $5,396.57 the client will not be able to afford his desired car
in 6 months of saving. This is due to his Expenses being so expensive in the budget,
however, cutting down on certain expenses may help the client afford the car, but if the
client does not want to let go any expenses, he will need to save for at least 6 months – or
longer so he will be able to buy his desired car. However, this payrate is not realistic, as a
employee would not usually receive a pay rise of up to 20%.
Strengths and limitati ons:

Name: Louis Greatbatch Teacher: Ms Ford

Strengths
Some strengths of the client’s budget include:
- The budget takes into account income, expenditure, and investments, as well as tracking
these.
- The budget is overall Easy to follow.
- It is also an effective method of saving.
- You can manage money efficiently.
- You can easily plan for the future.
- Budgeting can also Help with identifying problems, even before they may occur. An example
of this may be needing to raise finance to afford something in the future.

Limitations
Some limitations to the client’s budget may include:
- The person cannot afford to buy the car in the timeframe that they wanted to
- The Budget doesn’t take everything into account.
- after COVID-19, car prices rose.
- The budget may be quite inaccurate because it is based off of assumptions.
-

Further savings:

The client will need to save for a longer duration of time and may have to cut down on
expenses. Some ‘tactics’ of saving may include:
- Reduce cost on shoes or clothing.

- Reducing costs of other expenses and even cut down on some expenses to help
saving.

- New expenses plan: This plan cuts down on many expense that aren’t necessary.

Income plan (same as before):

Name: Louis Greatbatch Teacher: Ms Ford

 - With this new budget, the client will now be saving $413.25 rather than 50.19
before. This is a major improvement as it allows the client to shorten his time saving.

- With the clients’ new savings of $413.25 per week, his annual savings go up from
$2,607.88 to 21,489.

- This will mean that the client will only need to save up for 6 months more to get a
total of $16,141.07. This will purchase the car, and the client will have 3,191.07 spare
afterwards, that he can use on any of his car’s costs.

- However, with GST, the car’s price rises to $14,245 so the client will need to spend
an extra $1,295 over the money he is already spending.

- With the new budget talked about above, they will have saved a total of 10,744.5 in
6 months of extra savings, therefore they will be able to buy their desired car.

3. Conclusion
In the original budget, the client could not afford to purchase his desired car with 6 months
of saving. If the client wanted his desired car he would be forced to cut down on expenses.
By making some lifestyle changes, the client was able to purchase his car with an extra 6
months of saving, cutting down on entertainment, amount of money spent on clothes, and
cutting down his expenses on food. The new budget results in savings of $413.25 per week
rather than $50.19. However, maintenance costs of the car will need to be considered, as
well as fuel and registration, maintenance, and tires. However, this can be paid with the
clients left over money from purchasing the car.
Recommendati ons:

Further recommendations regarding the budget would be to include inflation, inflation is a

general rise in the price level in an economy over a period of time, inflation rates were
1.19% earlier this year. And no calculations have included increased costs. Another
recommendation would be to include more GST throughout the investigation.

Name: Louis Greatbatch Teacher: Ms Ford