EBK PFIN
6th Edition
ISBN: 8220103648844
Author: Billingsley
Publisher: CENGAGE L
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Question
Chapter 4, Problem 1LO
Summary Introduction
To discuss: The role of cash management in personal financial planning process.
An interest rate of financing rate is characterized as the extent of the amount loaned which a lender charges as interest to the mortgagor, typically stated as a yearly rate.
Expert Solution & Answer
Explanation of Solution
The role of cash management in personal financial planning process is as follows:
In personal financial planning, proficient money management guarantees sufficient funds for both family use and a useful savings program. In the year 2018, the Fed intends to raise interest rates, in this way the rates in the show will probably change.
However, the connection between the elective accounts will remain the equivalent. Moreover it is necessary to comprehend the significance of tracking their deposits and spending from their cash accounts.
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Pam and Jim are saving money for their two children who they plan to send to university.The eldest child will enter university in 5 years while the younger will enter in 7 years. Each child is expected spend four years at university. University fees are currently R20 000 per year and are expected to grow at 5% per year. These fees are paid at the beginning of each year.Pam and Jim currently have R40 000 in their savings and their plan is to save a fixed amount each year for the next 5 years. The first deposit taking place at the end of the current year and the last deposit at the date the first university fees are paid.Pam and Jim expect to earn 10% per year on their investments.What amount should they invest each year to meet the cost of their children’s university fees?
Chapter 4 Solutions
EBK PFIN
Ch. 4 - Prob. 1LOCh. 4 - Describe todays financial services marketplace,...Ch. 4 - Prob. 3LOCh. 4 - Prob. 4LOCh. 4 - Prob. 5LOCh. 4 - Develop a cash management strategy that...Ch. 4 - Adapting to a low-interest-rate environment. A...Ch. 4 - Prob. 2FPECh. 4 - Choosing a new bank. Youre getting married and...Ch. 4 - Prob. 4FPE
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