$14,285.72. $14,285.72 needs to be invested so that, after 10 years at 7.5% interest, the investment will be worth $25,000.
$97,709.93. $97,709.93 needs to be invested so that, after 35 years at 6.5% interest, the investment will be worth $320,000.
$48,813.56. $48,813.56 needs to be invested so that, after 270 months at 3.75% interest, the investment will be worth $90,000.
Elijah should budget $1,631.72 for needs, $979.03 for wants, and $652.69 for savings and debt service. When choosing where to live, what to eat, and what to drive, he should make choices that keep those costs, combined with debt service costs, gasoline, and utilities, below $1,631.72. This means he will have to make decisions about what his priorities are. Elijah should then figure out his wants, and stay within the limits here, that is, keep those costs below $979.03. Finally, he can begin to build his savings with the remaining $652.69.
Her monthly income is $3,641.66.
Needs (50%): $1,820.83, Wants (30%): $1,092.50, Savings (20%): $728.33
She only has budgeted $1,061.83 for other necessities. It is difficult to imagine Fran being able to afford to change jobs and move, unless she reallocates money that she would want to save or use for entertainment or takes on another job. If Fran uses all the money that the 50-30-20 budget sets aside for savings, she then would have $1,790.16 to spend on those other necessities. If she moves away from the 50-30-20 philosophy, she may be able to afford the move. However, that means changing her priorities.
Check Your Understanding
834.15 (rounded to two decimal places)
16 new drivers will be hired.
the amount a retailer adds to the cost of goods to cover overhead and profit
Interest is money paid by a borrower to a lender for the privilege of borrowing money.
The amount borrowed is the principal.
interest that is earned on both the principal and the interest from previous periods
Compare their effective annual yield.
A budget is an estimation of income and expenses over some period of time.
Expenses that represent basic living requirement and debt service.
David should allocate $1,735 to necessary expenses, $1,035 to expenses that are wants, and $690 to savings and extra debt service.
David spends $1,835.03 on necessary expenses, which is fairly close to the 50-30-20 budget philosophy guidelines. He spends $471.98 on expenses that are wants, which is well below the guideline of $1,035. He has $1,149.99 in extra income, which is well above the savings and debt service guidelines.
A deposit account, held at a bank or other financial institution, which bears some interest on the deposited money.
Once money is deposited in a CD, the money cannot be withdrawn until the end of the CD period.
A money market account is more flexible. Transactions can be made after creating the money market account.
Income must be below a threshold for a person to use a Roth IRA.
They invest in different investment vehicles so that no single investment can have a large impact on the value of the mutual fund.
Each year, the holder of the bond receives $200. For 10 years, that’s $2,000 total earned with the bond.
$3,500, which is 4% of her income
Loan with a fixed period, and the borrower pays a fixed amount per period until the loan is paid off
More is applied to the principal.
Spring (March) before the start of the fall term
The difference between the cost of college (including books, fees, room and board, etc.) and all non-loan financial aid they receive
In subsidized loans, the interest does not accrue while the student is still in school. In unsubsidized student loans, the interest begins accruing as soon as the money is disbursed.
Bank issued, store issued, charge (Travel/entertainment) cards
Due date, minimum payment due, and balance due
Cost of delivering the vehicle to the dealer
Registers your car with the state, gets the license plate, and assigns the title of the car to the lender
Interest rate higher loan term shorter
Title and registration, documentation fee, sales tax
Cover the damage caused to your car if involved in an accident with another vehicle
Any and all income, including wages, salary, interest earned, gifts, and winnings
After deductions are subtracted
After taxes are calculated, credits are subtracted from taxes owed.
No, only for up to $147,000