Posted: January 24th, 2023

# must be done by wednesday

## Question 1 (1 point)

What would be the value of a savings account started with \$690 , earning 5 percent (compounded annually) after 6 years?

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Use the appropriate Time Value of Money table [

Exhibit 1-A

,

Exhibit 1-B

,

Exhibit 1-C

, OR

Exhibit 1-D

]

(

)

## Question 2 (1 point)

Brenda Young desires to have \$23600 saved after 18 years from now for her kid’s college fund. If she will earn 4 percent (compounded annually) on her money, what amount should she deposit now?

Use the appropriate Time Value of Money table [Exhibit 1-A,  Exhibit 1-B,  Exhibit 1-C, OR Exhibit 1-D]

## Question 3 (1 point)

What amount would you have if you deposited \$9700 a year for 13 years at 3 percent (compounded annually)?

Use the appropriate Time Value of Money table [Exhibit 1-A,  Exhibit 1-B,  Exhibit 1-C, OR Exhibit 1-D]

## Question 4 (2 points)

What would be the net annual cost of the following checking account?

• Monthly fee : \$12.60
• Processing fee: \$0.58 per check
• Checks written: Average of 52 a month

## Question 5 (1 point)

A few years ago, Michael Tucker purchased a home for \$114000. Today the home is worth \$158000. His remaining mortgage balance is \$51000.

Assuming Michael can borrow up to 66 percent of the market value of his home, what is the maximum amount he can borrow?

## Question 6 (1 point)

Kim Lee 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 \$1770 per month. Her employer deducts a total of \$230 for taxes from her monthly pay. Kim also pays \$90 on credit card debt each month. The loan she needs for chiropractic school will cost an additional \$170 per month.

Calculate her debt payments-to-income ratio with college loan. Don’t forget to convert your answer to a percentage.

Round your answer to 2 decimal places. i.e. 20.12, 31.89, 10.02, 8.09, etc.

## Question 7 (1 point)

Kim Lee 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 \$3110 per month. Her employer deducts a total of \$230 for taxes from her monthly pay. Kim also pays \$60 on credit card debt each month. The loan she needs for chiropractic school will cost an additional \$110 per month.

Calculate her debt payments-to-income ratio without college loan.  Remember to convert your answer to a percentage!

Round your answer to 2 decimal places. i.e. 13.55, 21.89, 8.21, 10.99, etc.

## Question 8 (2 points)

Dorothy lacks cash to pay for a \$1,260 dishwasher. She could buy it from the store on credit by making 12 monthly payments of \$110. The total cost would then be \$1,320. Instead, Dorothy decides to deposit \$105 a month in the bank until she has saved enough money to pay cash for the dishwasher. One year later, she has saved \$1,348.20—\$1,260 in deposits plus interest. When she goes back to the store, she finds the dishwasher now costs \$1,461.60. Its price has gone up 16 percent, the current rate of inflation.

From the financial standpoint, was postponing her purchase a good trade-off for Dorothy?

Question 8 options:

No

Yes

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