Please complete and submit your homework on 2/18/16. Please show all work and computations in your Homework.
Makeup a realistic Spending Journal: Keep track of "Every Penny Counts" spending journal to record all spending habits for 30 days. Be sure to approximate the monthly costs and future income (starting salary for your job after college) and include them in the journal.
Personal Balance Sheet: Create a personal balance sheet for your assets, liabilities, and net worth.
Personal Cash Flow Statement: Use the information from your spending journal to help you create a personal cash flow statement with your total income, expenses and your net cash flow.
- These will most likely be turned in with a future HW journal submission (record 30 days).
Additional Problems:
1. Suppose you purchase 2 snacks on campus each day of the week for an average of $1.75 per purchase.
a) What is the daily cost?
b) What is the weekly cost?
c) What is the monthly cost?
d) What is the yearly cost?
e) What is the cost over a 4 year period (assuming you purchase each week of the year)?
2. Suppose you fill your gas tank an average of 2.5 times a week over the year. Suppose that the average cost to fill your tank is $47.50 over the same year.
a) What is your estimated weekly gas cost?
b) What is the estimated monthly gas cost?
c) What is the estimated yearly gas cost?
d) What is the estimated cost over a 5 year period (assuming you purchase each week of the year)?
e) What is the problem with calculating long term estimations as we did in part d?
3. Use the balance sheet equation to solve for the unknown value.
a) Suppose you have $21,800 in assets and $2,250 in Liabilities. What is your net worth?
b) Suppose your net worth is $2,186,800 and have liabilities of $488,950. What are your assets?
c) Suppose your net worth is $1,275 and have assets of $1870. What are your liabilities?
4. Create a personal Financial Statement using the example in your PowerPoint presentation for 3C Planning and Budgeting. Be sure to calculate your Net Worth.
Suppose you have $1486.25 in your checking and $2389.22 in savings account. You have stocks totaling $12,500. In addition you have personal property totaling $3400 and other assets of $1200. Your liabilities are $640 to your credit card, $1400 in taxes and $1800 in other liabilities.
5. Create a Personal Cash Flow Statement for the following information. Use the example in your PowerPoint presentation for 3C Planning and Budgeting. Be sure to calculate your Net Cash Flow.
You income from a part-time job is $1400 each month and earn $300 a month from a college fund. If your monthly expenses are $400 for rent, utilities are $45, phone is$50, an average of $250 for groceries and $500 for other.
6. Calculate your opportunity cost for 1 additional year of college according to the figure on slide 17 in PowerPoint presentation for Ch 3 Planning and Budgeting.
7. Suppose you could save $1200 a year for the next 42 years of work. If you could invest this in a retirement account earning 6.4% interest, how much would you have in 42 years when you retire?
8. Suppose you could save $250 a month for the next 45 years. If you could invest this in a retirement account earning 7.2% interest
a) How much would you have in 45 years when you retire?
b) How much interest did you earn?
9. Suppose you want to retire in 40 years to a retirement fund sufficient enough to pay you $150,000 in interest each year forever.
a) What balance would you need in the account to earn $150,000 in interest if APR is 9%?
b) How much would your monthly payments be to earn the amount in part a if you have 40 years to save?
c) How much interest did you earn over the 40 years?
10. Suppose you want to retire to a retirement fund sufficient enough to pay you $150,000 in interest each year forever.
a) What balance would you need in the account to earn $150,000 in interest if APR is 6.8%
b) How much would your monthly payments be to acquire the result from (a) if you plan to contribute into the account for the next 40 years?
11. Suppose your total income was $41000 last year. Your expenditures were as follows:
$18000 in rent and food, $1500 for interest on credit cards and loans, $5400 for car expenses, $11800 for miscellaneous expenses, and $5800 in taxes.
a) What are your total expenses?
b) Will you have a deficit or surplus?
c) What is your debt or surplus