Question
In: Finance
1. Donna estimates that her take-home pay for the coming year will be $1420 per month....
1. Donna estimates that her take-home pay for the coming year
will be $1420 per month. She expects total monthly expenses to be
as follows: housing and utilities, $800; food, $200; auto, gas, and
insurance, $220; credit card payment, $60; and other expenses $100.
The balance on her credit card is $4300, and she currently pays 18
percent interest on this balance. Donna would like to reduce her
credit card debt. If she decides to budget all of her net monthly
cash flow to this goal, how long will it take (in months) to pay
off her credit card?
A) 61
B) 43
C) 70
D) 33
2. Your bank pays a nominal rate of 4.70% interest on a savings
account. If the interest is compounded monthly, what is the annual
percentage yield (APY) of this account?
A) 4.70%
B) 5.10%
C) 4.80%
D) 4.84%
3. The purpose of reconciling a budget is to:
A) adjust income and spending so that your expenses do not exceed your income.
B) implement the budget plan.
C) balance your assets to your debt and net worth.
D) adjust income so that your surplus does not exceed your budgeted savings.
Solutions
Expert Solution
Answer 1 - Option C
solution
Total Monthly Expense excluding Credit card Payment = $ (800+200+220+100)
= $ 1320
So, Net cash Flow = $ 1420-1320 = $100
Balance of Credit Card = $ 4300
Interest =18% per.annum or 1.5% per.month
Computation
| Months | Amount | Interest @1.5% | Payment | Amount |
| Outstanding at | on Amt o/s at | (fixed ) | Outstanding at | |
| start of month | Start of month | (monthly) | end of month | |
| 1 | 4300.00 | 64.50 | 100.00 | 4264.50 |
| 2 | 4264.50 | 63.97 | 100.00 | 4228.47 |
| 3 | 4228.47 | 63.43 | 100.00 | 4191.89 |
| 4 | 4191.89 | 62.88 | 100.00 | 4154.77 |
| 5 | 4154.77 | 62.32 | 100.00 | 4117.09 |
| 6 | 4117.09 | 61.76 | 100.00 | 4078.85 |
| 7 | 4078.85 | 61.18 | 100.00 | 4040.03 |
| 8 | 4040.03 | 60.60 | 100.00 | 4000.63 |
| 9 | 4000.63 | 60.01 | 100.00 | 3960.64 |
| 10 | 3960.64 | 59.41 | 100.00 | 3920.05 |
| 11 | 3920.05 | 58.80 | 100.00 | 3878.85 |
| 12 | 3878.85 | 58.18 | 100.00 | 3837.04 |
| 13 | 3837.04 | 57.56 | 100.00 | 3794.59 |
| 14 | 3794.59 | 56.92 | 100.00 | 3751.51 |
| 15 | 3751.51 | 56.27 | 100.00 | 3707.78 |
| 16 | 3707.78 | 55.62 | 100.00 | 3663.40 |
| 17 | 3663.40 | 54.95 | 100.00 | 3618.35 |
| 18 | 3618.35 | 54.28 | 100.00 | 3572.63 |
| 19 | 3572.63 | 53.59 | 100.00 | 3526.22 |
| 20 | 3526.22 | 52.89 | 100.00 | 3479.11 |
| 21 | 3479.11 | 52.19 | 100.00 | 3431.30 |
| 22 | 3431.30 | 51.47 | 100.00 | 3382.77 |
| 23 | 3382.77 | 50.74 | 100.00 | 3333.51 |
| 24 | 3333.51 | 50.00 | 100.00 | 3283.51 |
| 25 | 3283.51 | 49.25 | 100.00 | 3232.76 |
| 26 | 3232.76 | 48.49 | 100.00 | 3181.25 |
| 27 | 3181.25 | 47.72 | 100.00 | 3128.97 |
| 28 | 3128.97 | 46.93 | 100.00 | 3075.91 |
| 29 | 3075.91 | 46.14 | 100.00 | 3022.05 |
| 30 | 3022.05 | 45.33 | 100.00 | 2967.38 |
| 31 | 2967.38 | 44.51 | 100.00 | 2911.89 |
| 32 | 2911.89 | 43.68 | 100.00 | 2855.57 |
| 33 | 2855.57 | 42.83 | 100.00 | 2798.40 |
| 34 | 2798.40 | 41.98 | 100.00 | 2740.38 |
| 35 | 2740.38 | 41.11 | 100.00 | 2681.48 |
| 36 | 2681.48 | 40.22 | 100.00 | 2621.70 |
| 37 | 2621.70 | 39.33 | 100.00 | 2561.03 |
| 38 | 2561.03 | 38.42 | 100.00 | 2499.44 |
| 39 | 2499.44 | 37.49 | 100.00 | 2436.94 |
| 40 | 2436.94 | 36.55 | 100.00 | 2373.49 |
| 41 | 2373.49 | 35.60 | 100.00 | 2309.09 |
| 42 | 2309.09 | 34.64 | 100.00 | 2243.73 |
| 43 | 2243.73 | 33.66 | 100.00 | 2177.38 |
| 44 | 2177.38 | 32.66 | 100.00 | 2110.05 |
| 45 | 2110.05 | 31.65 | 100.00 | 2041.70 |
| 46 | 2041.70 | 30.63 | 100.00 | 1972.32 |
| 47 | 1972.32 | 29.58 | 100.00 | 1901.91 |
| 48 | 1901.91 | 28.53 | 100.00 | 1830.43 |
| 49 | 1830.43 | 27.46 | 100.00 | 1757.89 |
| 50 | 1757.89 | 26.37 | 100.00 | 1684.26 |
| 51 | 1684.26 | 25.26 | 100.00 | 1609.52 |
| 52 | 1609.52 | 24.14 | 100.00 | 1533.67 |
| 53 | 1533.67 | 23.00 | 100.00 | 1456.67 |
| 54 | 1456.67 | 21.85 |
100.00<
 jeff jeffy answered 1 year agoRelated Solutions4. How would you calculate the take home for someone's take home salary per month. Include...4. How would you calculate the take home for someone's take home
salary per month. Include Federal taxes (assume single status),
state taxes of 10% for NC, 6% towards retirement, 4% total to
social security and Medicare.
Rate For Unmarried Individuals, Taxable Income Over
10% $0
12% $9,700
22% $39,475
24% $84,200
32% $160,725
35% $204,100
37% $510,300
Mike took his friend, Donna, out to dinner on her birth- day. While driving Donna home, Mike became ill and asked Donna to drive.Mike took his friend, Donna, out to dinner on her birth- day.
While driving Donna home, Mike became ill and asked Donna to drive.
While driving Mike’s car, Donna negligently injured another
motorist when she failed to stop at a red light. Mike has an auto
insurance policy with a liability insurance limit of $250,000 per
person for bodily injury liability. Donna has a similar auto
insurance policy with a liability limit of $100,000 per person.a. If a court awards...
A stock is expected to pay a dividend of$1 per share in 3-month and in 9-month....A stock is expected to pay a dividend of$1 per share in 3-month
and in 9-month. The stock price is$80. An investor has just taken a
long position in a 12-month futures contract on the stock. The zero
ratesfor 3-, 6-, 9-, 12-month are 5%, 5.5%, 6% and 6.5% per annum
with continuous compounding, respectively.6-month later, the stock
price is$82. The zero rates happen to be the implied forward rates
6-month ago.What is the value of the long position in...
ABC Company estimates the following data for the coming month: total variable costs $60,000.00, income tax...ABC Company estimates the following data for the coming month:
total variable costs $60,000.00, income tax rate 30%, contribution
margin percentage 60%. Find the estimated total sales for the
coming month.
a.
$100,000
A GUESS b.
$60,000 / 40%
c.
$60,000 / 60%
d.
$60,000 X 60%
Type or paste question here
Anne purchased an annuity from an insurance company that promised to pay her $35,000 per year...Anne purchased an annuity from an insurance company that
promised to pay her $35,000 per year for the next ten years. Anne
paid $236,250 for the annuity, and in exchange she will receive
$350,000 over the term of the annuity.
a. How much of the first $35,000 payment should Anne include in
gross income?(Do not round intermediate calculations.)
b.How much income will Anne recognize over the term of the
annuity?
Riley Company promises to pay Janet Anderson or her estate $150,000 per year for the next...
Riley Company promises to pay Janet Anderson or her estate $150,000
per year for the next 10 years, even if she leaves the company or
passes away to try to induce her to stay with the company. Riley
Company wants to properly record this transaction as deferred
compensation but is unsure how to record the cost. In addition,
Riley Company purchased a whole life insurance policy for Janet,
naming the company as the beneficiary. Riley Company wants to
determine if...
Joe negotiates an 8 year loan which requires him to pay 1200 per month for the...Joe negotiates an 8 year loan which requires him to pay 1200 per
month for the first 4 years and 1500 per month for the remaining
years. The interest rate is 13%, convertible monthly, and the first
payment is due in one month. What is the amount of the loan? (round
answer to nearest .01)
Q-1 (20p) A stock is announced to pay $1.20 per share in one month and...Q-1 (20p)
A stock is
announced to pay $1.20 per share in one month and in also expected
to pay $1.25 in 5 four
months. The stock price is $90, and the risk-free rate of interest
is 4% per annum
with continuous compounding for this problem. Suppose you just took
a short position in a
six- month forward
contract on the stock.
What are the “Forward Price” and the initial value of
the forward contract?
Three months...
For the coming year, Swain Company estimates fixed costs at Php90,000, the unit variable cost at...For
the coming year, Swain Company estimates fixed costs at Php90,000,
the unit variable cost at Php20, and the unit selling price at
Php80.
Determine
(a) the break-even point in units of sales
(b) the unit sales required to realize operating income of
Php150,000
(c) the probable operating income if sales total
Php500,000.
Chlo is planning for her 15 year-old daughter’s university education. She estimates that 1 year of university...Chlo is planning for her 15 year-old daughter’s university
education. She estimates that 1 year of university would
cost $15,000 in today’s dollars, but will rise with the rate of
inflation of 2% year over year. How much would Chlo need
to have accumulated by the time her daughter starts university at
the age of 19 provided she attends university for 3 years and will
receive funds at the beginning of each year? Assume an
investment rate of 3.6%, compounded monthly
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
ADVERTISEMENT
|