Exam 4: Managing Money

Solve. -Calculate the monthly payment for a student loan of $135,240 at a fixed APR of 5.7% for 20 years.

Use the compound interest formula to determine the accumulated balance after the stated period. Assume that interest iscompounded annually. -$11,000 is invested at an APR of 2.2% for 4 years.

Determine whether the spending pattern described is at, above, or below the national average. Assume that any salariesor wages are after tax. -A single 48-year old man with a monthly salary of $4800 spends $1200 on rent.

Decide whether the statement makes sense. Explain your reasoning. -I am young and I'm going to invest my money for at least 6 years. I am going to put all my money into stocks. The return is higher than for other investments and over such a time period, there is no risk of losing any of the principal. Historically there has never been a 6-year period in which the Dow ended lower than it started.

Solve the problem. -Calculate the current yield for a $100 Treasury bond with a coupon rate of 5% that has a market value of $85.

Write the word or phrase that best completes each statement or answers the question.Decide whether the statement makes sense. Explain your reasoning. -Steve is planning to open a savings account either at Quarterly Bank or at Daily Bank. Quarterly Bank is offering an APR of 5.5% compounded quarterly, which is clearly the better deal since Daily Bank is offering an APR of 5.5% but with daily compounding.

Use the given stock table to answer the question. -Based on the fact that stocks historically trade at an average P/E ratio of about 12-14, does the stock price of company ABC seem cheap, about right, or expensive right now?

Use the compound interest formula to determine the accumulated balance after the stated period. Assume that interest iscompounded annually. -$1070 is invested at an APR of 3.5% for 13 years.

Solve the problem. Refer to the table if necessary. 2013 Marginal Tax Rates, Standard Deductions, and Exemptlons** - Each higher marginal rate begins where the prior one leaves off. For example, for a single person, the $15 \%$ marginal rate affects income starting at $\$ 8925$ , which is where the $10 \%$ rate leaves off, and continuing up to $\$ 36,250$ . " This table ignores the effects of (i) exemption and deduction phase-outs that apply to high-income taxpayers and (ii) the alternative minimum tax (AMT) that affects many middle- and high-income taxpayers. -You are married filing jointly and have a taxable income of $287,874. You make monthly contributions of $1095 to a tax-deferred savings plan. Calculate the effect on annual take-home pay Of the tax-deferred contribution.

You need a loan of $100,000 to buy a condo. Calculate your monthly payments and total closing costs for each choice. -Choice 1: 30-year fixed rate at $4 \%$ with closing costs of $\$ 1323$ and no points Choice 2: 20-year fixed rate at $3.5 \%$ with closing costs of $\$ 1323$ and 2 points

Solve the problem. Refer to the table if necessary. -Kelsey earned $65,208 in wages. Conner earned $65,208, all in dividends and long-term capital gains. Calculate the overall tax rate for each, including both FICA and income taxes. Assume they Are both single and take the standard deduction. Note that long-term capital gains and dividends Are taxed at 0% for income in the 10% and 15% tax brackets and at 15% for income in all higher tax Brackets.

Solve the problem. Refer to the table if necessary. 2013 Marginal Tax Rates, Standard Deductions, and Exemptlons** - Each higher marginal rate begins where the prior one leaves off. For example, for a single person, the $15 \%$ marginal rate affects income starting at $\$ 8925$ , which is where the $10 \%$ rate leaves off, and continuing up to $\$ 36,250$ . " This table ignores the effects of (i) exemption and deduction phase-outs that apply to high-income taxpayers and (ii) the alternative minimum tax (AMT) that affects many middle- and high-income taxpayers. -Your deductible expenditures $4146 for contributions to charity and $635 for state income taxes. Your filing status entitles you to a standard deduction of $6100. Should you itemize your Deductions rather than claiming the standard deduction? If so, what is the difference?

Solve the equation for the unknown quantity. - $8 n - 10 = 46$

Determine whether the spending pattern described is at, above, or below the national average. Assume that any salariesor wages are after tax. -A single 31-year old man with a monthly salary of $3100 spends $560 on food.

Decide whether the statement makes sense. Explain your reasoning. -Sandi has a credit card balance of $4000. The credit card company charges interest of APR = 18%, compounded daily. She's broke. She figures if she skips making any payments for three months, she'll end up owing an extra $180 at the end of the three months. That's because 18% APR is equivalent to 1.5% monthly and 1.5% of $4000 is $60, and 3 times $60 is $180.

Solve the problem. Refer to the table if necessary. 2013 Marginal Tax Rates, Standard Deductlons, and Exemptlons** - Each higher marginal rate begins where the prior one leaves off. For example, for a single person, the $15 \%$ marginal rate affects income starting at $\$ 8925$ , which is where the $10 \%$ rate leaves off, and continuing up to \$36,250. " This table ignores the effects of (i) exemption and deduction phase-outs that apply to high-income taxpayers and (ii) the alternative minimum tax (AMT) that affects many middle- and high-income taxpayers. -Kyle is single and earned wages of $34,036. He received $362 in interest from a savings account. He contributed $549 to a tax-deferred retirement plan. He had $405 in itemized deductions from Charitable contributions. Calculate his adjusted gross income.

Solve the problem. -Calculate the annual interest for a $1000 Treasury bond with a current yield of 3.7% that is quoted at 106 points.

Solve the problem. - $\$ 200$ is deposited into a savings account at $5 \%$ interest, compounded monthly. To the nearest year, how long will it take for the account balance to reach $\$ 537$ ?

Provide an appropriate response. -A ______ gives you a share of ownership in a company.

Solve the problem. Refer to the table if necessary. -Carl is single and has a taxable income of $43,367. Calculate the amount of tax owed.