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You've just received a $10,000 bonus at work and you're trying to decide how to use it wisely. Your current financial situation includes $5,000 in credit card debt at 18% interest, a $200,000 mortgage at 4% interest, and $15,000 in a savings account earning 1% interest. You also have the option to invest in your company's 401(k) plan, which offers a 50% match on contributions up to 6% of your salary. Your annual salary is $80,000, and you're currently contributing 3% to your 401(k). You have no other significant debts or savings. Considering your current financial picture, what would be the most effective way to allocate this $10,000 bonus to improve your overall financial health?

You've just received a $10,000 bonus at work and you're trying to decide how to use it wisely. Your current financial situation includes $5,000 in credit card debt at 18% interest, a $200,000 mortgage at 4% interest, and $15,000 in a savings account earning 1% interest. You also have the option to invest in your company's 401(k) plan, which offers a 50% match on contributions up to 6% of your salary. Your annual salary is $80,000, and you're currently contributing 3% to your 401(k). You have no other significant debts or savings. Considering your current financial picture, what would be the most effective way to allocate this $10,000 bonus to improve your overall financial health?

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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You've just received a $10,000 bonus at work and you're trying to decide how to use it wisely. Your current financial situation includes $5,000 in credit card debt at 18% interest, a $200,000 mortgage at 4% interest, and $15,000 in a savings account earning 1% interest. You also have the option to invest in your company's 401(k) plan, which offers a 50% match on contributions up to 6% of your salary. Your annual salary is $80,000, and you're currently contributing 3% to your 401(k). You have no other significant debts or savings. Considering your current financial picture, what would be the most effective way to allocate this $10,000 bonus to improve your overall financial health?
Transcribed Image Text:You've just received a $10,000 bonus at work and you're trying to decide how to use it wisely. Your current financial situation includes $5,000 in credit card debt at 18% interest, a $200,000 mortgage at 4% interest, and $15,000 in a savings account earning 1% interest. You also have the option to invest in your company's 401(k) plan, which offers a 50% match on contributions up to 6% of your salary. Your annual salary is $80,000, and you're currently contributing 3% to your 401(k). You have no other significant debts or savings. Considering your current financial picture, what would be the most effective way to allocate this $10,000 bonus to improve your overall financial health?
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