PROBLEM SET

PROBLEM SET - Problem Set 1 Madeline and Hamish OBrien were...

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Problem Set 1 Madeline and Hamish O’Brien were married three years ago. They are both aged 30. They have a daughter Jessica who is two years old. Hamish is employed as a structural engineer and earns $70,000 per annum. Madeline is wholly engaged in looking after Jessica and has no income of her own. The O’Briens currently live in a rented three-bedroom townhouse at a cost of $400 per week. They are both interested in living the ‘good life’ and both have credit cards with $20,000 limits. They pay all their expenses using these credit cards on which they currently owe approximately $10,000. When they receive their credit card bills they make only the minimum payment. Besides this debt, Hamish has a personal loan on his Toyota Celica amounting to a repayment of $300 per month. Hamish currently pays 3% of his salary into an employer- sponsored superannuation fund. This is in addition to the 9% contributed by his employer under the Superannuation Guarantee Scheme. The O’Briens have a small amount of
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