Robert and Nicole Patterson, both age 26, have been married for four years and have no children. Robert is a licensed electrician earning $46,000 per year, and Nicole earns $41,000 annually as a middle-school teacher. Robert would like to go to half time on his job and return to school on a part time basis; he is one year short of finishing his bachelor's degree in engineering. His education expenses would be about $10,000 per year, which could be partially covered by student loans. He has not yet discussed his plans with Nicole. Robert and Nicole have recently started saving for retirement through their employment and have set aside some savings for emergencies. They have substantial credit card debt and are still paying off their student loans. The couple rents a two-bedroom apartment. Robert always thought it smart to save all of their receipts, bank statements, and other financial documents. His system for organizing their records is very simple; each month he puts everything in a manila envelope and then puts the 12 envelopes into a box at the end of the year. Robert knows that his educational plans will have financial implications for the couple. He wants to factor these financial issues into his discussion with Nicole about his plans. To this point, they have never developed financial statements or explicit financial goals. What do you recommend to Robert for his talk with Nicole on the subject of financial planning regarding: 1. Using the information in Robert's newly prepared financial statements to summarize the family's financial situation? 2. Starting a budgeting process to guide saving and spending?

Amount of Insurance Needed. Peter is married and has two children. He wants to be sure that he has sufficient life insurance to take care of his family if he dies.​ Peter's wife is a homemaker but attends college​ part-time pursuing a law degree. It will cost approximately ​$40,000 for her to finish her education. Because the children are​ teenagers, Peter feels he will only need to provide the family with income for the next ten years. He further calculates that the household expenses run approximately ​$61,600 per year excluding the mortgage payments. The balance on the home mortgage is $ 125,000. Peter set up a college fund for his children when they were​ babies, and it currently contains sufficient funds for them to attend college. Assuming that​ Peter's wife can invest the insurance proceeds at 9​%, calculate the amount of insurance Peter needs to purchase. The amount of life insurance Peter would need to purchase is?

Bruce and Amanda are married during the tax year. Bruce is a botanist at Green Corporation. Bruce earns a salary of $56,000 per year. Green Corporation has an accountable reimbursement plan. During the year, Bruce has $5,000 of employee expenses. Green Corporation reimburses Bruce for only $4,000 of expenses.Bruce decides to put $5,500 into a Traditional IRA. Amanda owns a financial consulting firm as a sole proprietor (it qualifies as a full trade or business). Amanda generates $80,000 of revenues during the year. She has the following business payments associated with her firm:● Utilities: $2,000● Office Rent: $14,000● Self-Employment Tax: $5,000● Salary for her secretary: $20,000● Fines/Penalties: $8,000● Payroll Taxes (Employer Portion): $1,000● Business Meals: $2,000● Bribe to police officer to forgive parking violation $1,500Due to the income and expenses above, Amanda has $39,500 of Qualified Business Income. Also, during the year a tornado damaged the roof of their personal…

Jinhee Ju, 27, just received a promotion at work that increased her annual salary to $40,000. She is eligible to participate in her employer's 401(k) plan, to which the employer matches dollar-for-dollar workers' contributions up to five percent of salary. However, Jinhee wants to buy a new $25,000 car in 4 years, and she wants to save enough money to make a $8,000 down payment on the car and finance the balance. Also in her plans is a wedding. Jinhee and her boyfriend, Paul, have set a wedding date 2 years in the future, after he finishes medical school. Paul will have $95,000 of student loans to repay after graduation. But both Jinhee and Paul want to buy a home of their own as soon as possible. This might be possible because at age 30, Jinhee will be eligible to access a $55,000 trust fund left to her as an inheritance by her late grandfather. Her trust fund is invested in 8 percent government bonds. a. Justify Jinhee's participation in her employer's 401(k) plan using the time…

Reba Dixon is a fifth-grade school teacher who earned a salary of $38,000 in 2021. She is 45 years old and has been divorced for four years. She receives $1,200 of alimony payments each month from her former husband (divorced in 2016). Reba also rents out a small apartment building. This year Reba received $50,000 of rental payments from tenants and she incurred $19,500 of expenses associated with the rental.Reba and her daughter Heather (20 years old at the end of the year) moved to Georgia in January of this year. Reba provides more than one-half of Heather’s support. They had been living in Colorado for the past 15 years, but ever since her divorce, Reba has been wanting to move back to Georgia to be closer to her family. Luckily, last December, a teaching position opened up and Reba and Heather decided to make the move. Reba paid a moving company $2,270 to move their personal belongings, and she and Heather spent two days driving the 1,620 miles to Georgia.Reba rented a home in…

Bob has lost his job and had to move back in with his mother. She agreed to let Bob have his old room back on the condition that he pay her $250 rent per month, and an additional $1500 every other year to pay for her biannual jaunt to Florida. Since he is down on his luck, she will allow him to pay his rent at the end of the year. If inflation is 3% and Bob’s interest rate is 5%, how much is the present cost (in Year-1 dollars) for a 5-year contract with mom? (Note: Mom’s trips are in Years 2 and 4).

Selma and Patty Bouvier are twins and both work at the Springfield DMV.  Selma and Patty Bouvier decide to save for​ retirement, which is 35 years away. ​ They'll both receive an annual return of   9 percent on their investment over the next 35 years.  Selma invests   $2,100 per year at the end of each year only for the first 10 years of the​ 35-year period   —for a total of   $21,000 saved.  Patty​ doesn't start saving for 10 years and then saves   $2,100 per year at the end of each year for the remaining 25 years   —for a total of   $52,500 saved.  How much will each of them have when they​ retire?           Question content area bottom Part 1 a.  How much will Selma have when she​ retires?   ​$   enter your response here   ​(Round to the nearest​ cent.)

Janine is 25 and has a good job at a biotechnology company. Janine estimates that she will need $946,000 in her total retirement nest egg by the time she is 65 in order to have retirement income of $24,500 a year. (She expects that Social Security will pay her an additional $16,000 a year.) She currently has $7,000 in an IRA, an important part of her retirement nest egg. She believes her IRA will grow at an annual rate of 6 percent, and she plans to leave it untouched until she retires at age 65. How much money will Janine have to accumulate in her company's 401(k) plan over the next 40 years in order to reach her retirement income goal? Use Exhibit 1-A. (Round time value factor to 3 decimal places. Round intermediate and final answer to 2 decimal places.) 401(k) accumulation

Pam is separated from her husband, Ted. Ted moved to an apartment in the same city two years ago, but they have not finalized their divorce yet. They live in a common law state. They have one daughter, Rainey, who is eight years old and lives with Pam most of the time. She spends every other weekend and usually one week night with her father. Ted works for XYZ International. He earned a salary of $96,000 for the current year. His salary was his only source of income.   Pam works for ABC Corp. as an accountant. Her salary for the current year was $88,000. ABC is a great place to work. Pam’s health insurance (valued at $4,800 per year) and $6,000 in childcare benefits are provided by ABC Corp. She even received a Christmas bonus of $2,500 in addition to her salary. She held on to the check until January when she cashed it to use on a ski vacation for her and Rainey.   Pam slipped and fell at work. She had to undergo surgery on her ankle. She received worker’s compensation benefits…

Martha and Louis Mitchell are a dual-career couple who just had their first child. Louis, age 30, already has a group life insurance policy, but Martha's employer does not offer a life insurance benefit. A financial planner is recommending that the 27- year-old Martha buy a $250,000 whole life policy with an annual premium of $1,670 (the policy has an assumed rate of earnings of 5 percent a year). Help Martha evaluate this advice and decide on an appropriate course of action .