Current annual savings rate is 2.00%We assume that this will remain constant.John would like to accumulate a 10% down paymentThis is the ultimate objective of the model.John believes his current job is safe (hisincome is safe)As far as job is safe, it has no financial impact. No additional information is available to assume otherwise.John’s monthly net income (after taxes)is $3,000We assume that this will remain constant.John’s credit card limit is $10,000 with no outstanding balanceDown-payment should be paid from bank account, so credit card limit has no impact.John’s cost of utilities is $300 a monthJohn has control over utilities by changingconsumption habits.John takes transit to work. A monthly bus pass cost is currently $100We assume that it will remain constant as this is the lowest commuting expense possible for John and he has no control over bus pass price. John does not think he will be getting araise in the next two years.As far as no raise is expected, it has no financial impact. No additional information is available to assume otherwise.John’s monthly entertainment is expenses is $200John has control over adjusting his entertainment expenses.John wants to buy a home in the suburbsJohn can buy house worth $400,000 anywhere.John has $5000 in a separate savings account specifically allocated for travel in the next year.John has control over this amount by not utilizing it for travel.John’s monthly food cost is $500. He prefers to eat out as he does not have a lot of time to cook at home.John has control over adjusting his food expenses by changing his eating habits.John does not want to purchase a home that is older than 10 years.This has nothing to do with $40,000 downpayment saving goal.
2.With the facts classified, formulate a problem statement (1-2 sentences and should be in the form of a question) that includes all goals and key assumptions. In other words, what is john trying to solve under what general circumstances?