Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
Bartleby Related Questions Icon

Related questions

bartleby

Concept explainers

Question

PLEASE answer all using template attached. 

PLEASE only answer if sure of SOLUTION.

WILL THUMBS UP IF CORRECT. 

a.
Net Income: Assume that your starting salary will be $55,000 per year, and assume that you have no
additional income sources. Also, assume that Federal income taxes are 27% of your gross income, and
that there is not any state tax in Texas. What is your monthly net income?
b. Mortgage: Select the cost of a house that you can afford. Look up the current interest rate (30 year)
loan on bankrate.com and calculate your monthly mortgage payment for a 30-year loan. You may
assume for this assignment that you are able to get the loan with no money down. What is your monthly
mortgage payment? (Show your final calculations)
c. Investments: Calculate how much you will have to save each month between now and then to have
$300,000 in your retirement account when you retire at 65, assuming a rate of return of 5% per year?
(Show your final calculations)
d. Automobile: You also decide to purchase a new car. Select the cost of a vehicle that you can afford.
Look up the current auto loan interest rate (bankrate.com) and calculate your monthly auto loan
payment. You may choose how long to make payments, and you may also assume for this assignment
that you are able to get the loan with no money down. What is your monthly automobile payment?
(Show your final calculations)
e. Other Deductions: You still have other expenses to consider. The government requires around 6.2% of
your gross pay for social security, 1.45% of your gross pay for medicare, and 1.5% of the value of your
home for the annual property tax. What is your monthly payment for these deductions?
f. Insurance: You are still not done allocating your paycheck. Assume that you pay annually 0.5% of your
home value in home insurance. You also pay $1,000/year in auto insurance, $2,500 / year in medical
and dental insurance, and $350 / year in life insurance. What is your monthly payment for these
deductions?
g. Living Expenses: Assume reasonable values for your living expenses. (You may adjust these numbers to
fit your estimated costs, but a good starting point for monthly costs are Utilities: $150, TV: $40, Internet:
$30, Cell Phone: $40, Phone: $40) You should also include estimates for food, gas, entertainment, and
any other expense you can think of. What is your monthly payment for all of your living expenses?
h. Balance the Books: Ensure that you can meet your monthly budget with all of your monthly
expenditures. A good way to do this is to set up your budget in an itemized spreadsheet so that you can
tweak the numbers as needed. Were you able to purchase everything that you thought you could? What
changes did you have to make? List any other assumptions that you had to make on this assignment.
expand button
Transcribed Image Text:a. Net Income: Assume that your starting salary will be $55,000 per year, and assume that you have no additional income sources. Also, assume that Federal income taxes are 27% of your gross income, and that there is not any state tax in Texas. What is your monthly net income? b. Mortgage: Select the cost of a house that you can afford. Look up the current interest rate (30 year) loan on bankrate.com and calculate your monthly mortgage payment for a 30-year loan. You may assume for this assignment that you are able to get the loan with no money down. What is your monthly mortgage payment? (Show your final calculations) c. Investments: Calculate how much you will have to save each month between now and then to have $300,000 in your retirement account when you retire at 65, assuming a rate of return of 5% per year? (Show your final calculations) d. Automobile: You also decide to purchase a new car. Select the cost of a vehicle that you can afford. Look up the current auto loan interest rate (bankrate.com) and calculate your monthly auto loan payment. You may choose how long to make payments, and you may also assume for this assignment that you are able to get the loan with no money down. What is your monthly automobile payment? (Show your final calculations) e. Other Deductions: You still have other expenses to consider. The government requires around 6.2% of your gross pay for social security, 1.45% of your gross pay for medicare, and 1.5% of the value of your home for the annual property tax. What is your monthly payment for these deductions? f. Insurance: You are still not done allocating your paycheck. Assume that you pay annually 0.5% of your home value in home insurance. You also pay $1,000/year in auto insurance, $2,500 / year in medical and dental insurance, and $350 / year in life insurance. What is your monthly payment for these deductions? g. Living Expenses: Assume reasonable values for your living expenses. (You may adjust these numbers to fit your estimated costs, but a good starting point for monthly costs are Utilities: $150, TV: $40, Internet: $30, Cell Phone: $40, Phone: $40) You should also include estimates for food, gas, entertainment, and any other expense you can think of. What is your monthly payment for all of your living expenses? h. Balance the Books: Ensure that you can meet your monthly budget with all of your monthly expenditures. A good way to do this is to set up your budget in an itemized spreadsheet so that you can tweak the numbers as needed. Were you able to purchase everything that you thought you could? What changes did you have to make? List any other assumptions that you had to make on this assignment.
a) Net Income:
Gross Salary=
State Taxes (0%) =
Federal Taxes (27%) =
Net Annual Salary =
Net Monthly Salary =
b) Mortgage:
Cost of House (Loan Value) =
APR=
Payback Periods =
Monthly Mortgage Payment =
c) Retirement Investment:
Savings at Retirement =
Saving Periods =
Interest Rate =
Savings Deposit / month=
d) Automobile Payment:
Cost of Vehicle (Loan Value) =
APR =
Payback Periods =
Monthly Automobile Payment=
e) Other Deductions:
Social Security (6.2%) =
Medicare (1.45%) =
Property Tax (1.5% House Value) =
Total Other Deductions =
f) Insurance:
Home Insurance (0.5% House Value) =
Auto Insurance =
Medical/Dental Insurance =
Life Insurance =
Total Insurance Costs=
g) Living Expenses:
Utilities =
TV =
Internet =
Cell Phone=
Phone =
Gas =
Food =
Credit Card =
Other =
Total Living Expenses =
Total Net Income Per Month=
Total Expenses Per Month =
Difference =
/year
/year
/year
/year
month
monthly payments
month
monthly deposits
/month
monthly payments
/month
/month
/month
/month
/month
/month
/month
/month
/month
/month
/month
/month
/month
/month
month
/month
/month
/month
/month
/month
/month
/month
/month
expand button
Transcribed Image Text:a) Net Income: Gross Salary= State Taxes (0%) = Federal Taxes (27%) = Net Annual Salary = Net Monthly Salary = b) Mortgage: Cost of House (Loan Value) = APR= Payback Periods = Monthly Mortgage Payment = c) Retirement Investment: Savings at Retirement = Saving Periods = Interest Rate = Savings Deposit / month= d) Automobile Payment: Cost of Vehicle (Loan Value) = APR = Payback Periods = Monthly Automobile Payment= e) Other Deductions: Social Security (6.2%) = Medicare (1.45%) = Property Tax (1.5% House Value) = Total Other Deductions = f) Insurance: Home Insurance (0.5% House Value) = Auto Insurance = Medical/Dental Insurance = Life Insurance = Total Insurance Costs= g) Living Expenses: Utilities = TV = Internet = Cell Phone= Phone = Gas = Food = Credit Card = Other = Total Living Expenses = Total Net Income Per Month= Total Expenses Per Month = Difference = /year /year /year /year month monthly payments month monthly deposits /month monthly payments /month /month /month /month /month /month /month /month /month /month /month /month /month /month month /month /month /month /month /month /month /month /month
Expert Solution
Check Mark
Knowledge Booster
Background pattern image
Finance
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Essentials Of Investments
Finance
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Mcgraw-hill Education,
Text book image
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:9781260013962
Author:BREALEY
Publisher:RENT MCG
Text book image
Financial Management: Theory & Practice
Finance
ISBN:9781337909730
Author:Brigham
Publisher:Cengage
Text book image
Foundations Of Finance
Finance
ISBN:9780134897264
Author:KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:Pearson,
Text book image
Fundamentals of Financial Management (MindTap Cou...
Finance
ISBN:9781337395250
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning
Text book image
Corporate Finance (The Mcgraw-hill/Irwin Series i...
Finance
ISBN:9780077861759
Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:McGraw-Hill Education