Becky graduated with a master degree in Personal Financial Planning. After working two years in a small financial planning firm, Becky earns $70,870 annually and saves $12,418 a year. What is her average propensity to consume? (Keep 2 decimal places)
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A: 1.
Becky graduated with a master degree in Personal Financial Planning. After working two years in a small financial planning firm, Becky earns $70,870 annually and saves $12,418 a year. What is her average propensity to consume? (Keep 2 decimal places)
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- Starting on the day Kelly was born, her mother has invested $50 at the beginning of every month in a savings account that earns 2.20% compounded monthly. a. How much did Kelly have in this account on her 22nd birthday? Assume that there was no deposit on that day. b. What was her mother's total investment? c. How much interest did the investment earn? How much should Diana's dad invest into a savings account today, to be able to pay for Diana's rent for the next five years if rent is $950 payable at the beginning of each month? The savings account earns 3.75% compounded monthly.Michelle is attending college and has a part-time job. Once she finishes college, Michelle would like to relocate to a metropolitan area. She wants to build her savings so that she will have a "nest egg" to start her off. Michelle works out her budget and decides she can afford to set aside $80 per month for savings. Her bank will pay her 4% per year, compounded monthly, on her savings account. What will be Michelle's balance in five years?Income Profile Adjusted Budget Employment Income Interest/Dividends Other TOTAL INCOME Essential Expenses Mortgage/Rent Utilities Telephone Groceries Child Care Pet Care Clothing Transportation Gas/Fuel Insurance Health club dues Life Insurance Medicine Veterinarian Savings Non-Essential Expenses Entertainment Dining Out Vacation Subscriptions Other TOTAL Expenses Surplus/Shortage
- Jing, a recent engineering graduate, never took engineering economics. When she graduated, she was hired by a prominent engineering firm. The earnings from this job allowed her to deposit $1000 each quarter into a savings account. There were two banks that offered savings accounts in her town (a small town!). The first bank was offering 5.0% interest compounded continuously. The second bank offered 5.125% compounded monthly. Jing decided to deposit in the first bank because it offered continuous compounding. Did she make the right decision?A man wants to set up a 529 college savings account for his granddaughter. How much would he need to deposit each year into the account in order to have $40,000 saved up for when she goes to college in 16 years, assuming the account earns a 4% return.Michelle wants to buy a car when she graduates from Central University 6 years from now. She believes that she will need $30,700 to buy the car. Click here to view the factor table. (a) Calculate how much money Michelle must put into her savings account today to have $30,700 in 6 years, assuming she can earn 14% compounded annually. (For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to 0 decimal place, e.g. 58,975.) Amount $ (b) Calculate how much money Michelle must put into her savings account today to have $30,700 in 6 years, assuming she can earn 14% compounded semiannually. (For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to 0 decimal place, e.g. 58,975.) Amount $ %24
- Lily graduated from UCSD in 2015. Right now she has an excellent job with a take-home income (after taxes) of $5,000 a month. The following is her financial situation: 1. She is single and shares an apartment with a roommate. Her monthly expenses in December 2020 were: Rent: Utilities (including cell phone): Food (including eating out) Car payment Gas Student loan payment Credit card payment Personal loan payment Clothing and personal items TOTAL Net loss of $450.00 As of December 31, 2020, what was Lily's net income for the month of December 2020? Express it in terms of a net gain or a net loss for the month. Net gain of $450.00 $1,400 600 600 No gain or loss No answer text provided. 500 200 1,100 500 300 250 $5,450Kim is trying to decide whether she can afford a loan she needs in order to go to chiropractic school. Right now Kim is living at home and works in a shoe store, earning a gross income of $970 per month. Her employer deducts $221 for taxes from her monthly pay. Kim also pays $98 on several credit card debts each month. The loan she needs for chiropractic school will cost an additional $109 per month. Help Kim make her decision by calculating her debt payments-to-income ratio with and without the college loan. (Remember the 20 percent rule.) (Enter your answers as a percent rounded to 2 decimal places.) Debt Payments-to-Income Ratio Ratio with college loan Ratio without college loanDeb and Rusty have just gotten married and wish to buy a home. They both work in Boston and have a combined income of $90,000. They found a modest starter house which they are buying for $350,000. 1. They plan to use their $40,000 is savings to cover the closing costs the bank will charge them, which are 1% of the amount they borrow from the bank. The rest of the savings will be used as a down payment. Determine the largest amount they can use for a down payment and still pay the closing costs. 2. Using the amount Deb and Rusty have to borrow from part 1, open Excel and create a 20-year amortization schedule, giving monthly payments for the amount they borrowed at a 4.5% annual interest rate. You must use the pmt function in Excel to compute the monthly payment. Title this worksheet Amortization. For your answer to this question write “See Excel Workbook”. 3. Use the amortization schedule to compute the total amount of interest they will pay to the bank over the 20 years. 4. Create a…
- Diana has determined the following information about her own financial situation. She has to pay a monthly rent of $1,488, her monthly expenditure on food is $596, the phone and internet bill for the month was $55, the electricity bill for the month was $60; she spends on average $316 per month on eating out. Gasoline and monthly parking costs her $159 and her personal computer is valued at $1,067. Diana's checking account is worth $2,473 and her savings account is worth $2,393. She owns her own house that has a market value of $211,983 and her car is worth $16,008, of which she still owes $6,122 to the local bank. She pays $235 per month for her car loan. She has household possessions worth $7,109 and a home sound system worth $1,717 and she has a retirement account with $31,294 in it. She has a monthly income of $5,604. She has a mortgage of $127,571 with a payment of $550 per month, an educational loan with a balance of $14,064 and payments of $279 per month, and a MasterCard credit…Catrina recently graduated from college with a degree in political science. She started a job that pays her $48,000 per year. Her monthly net income is $2,800. She’s moving into her own one-bedroom apartment. She has a car that she makes payments on and she pays for car insurance. She also adopted a cat, so she now has to pay for cat food and vet bills. Catrina has budgeted for the following monthly expenses based on what she expects to spend: Using the information about Catrina's proposed monthly budget above, answer the following questions. Is Catrina budget balanced? If not, what can Catrina do to balance her budget? Is Catrina following the 50, 30 and 20 spending plan in terms of savings? Explain. If Catrina decides to increase savings where would you suggest that she decrease her spending?Consider a family that has one working parent, a stay‐at‐home parent, and three children. Two of the children are in elementary school, and the youngest child is in Pre‐Kindergarten. They have a house, a car, and a minivan, and they carry some credit card debt. The house is valued at $89,000 with a mortgage balance of $80,000. The car is worth $15,000. The family owes $15,000 on this auto loan. The minivan is worth $20,000. The family owes $16,000 on this auto loan. They financed new household furnishings valued at $5,000. The family owes $4,500 on this loan. They have $15,000 in their retirement account. They have $1,500 in emergency savings, $1,000 in savings, $500 in checking, and $1,500 in a CD. They have $200 in cash. Balances on the credit cards total $15,000. The family pays $500 per month for school loans; the current balance is $25,000. The family pays $350 per month for Pre‐Kindergarten tuition. All of the children are on soccer teams, which costs $100 per month. For this…
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