1.(TCO A) Use future or present value techniques to
solve the following problems.
(Note: You can use tables or a financial calculator. If you use a
calculator, please provide the inputs you used to solve the problems.) (5
points each = total 20 points)
a. Starting with $20,000, how much will you have in 20 years if
you can earn 5% on your money?
b. If you inherited $100,000 today and invested all of it in a security that
paid an 8% rate of return, how much would you have in 15 years?
c. If the average new home costs $200,000 today, what will be the value in 10
years if inflation is 4% per year?
d. If you can earn 9% per year, how much will you have to save each year if you
want to retire in 40 years with $3 million?
2. (TCO A) Construct a balance sheet for the Jones
family from the following information. Be sure the format is correct. (20
points for balance sheet)
Is the Jones family solvent or insolvent? Explain. (5 points)
Show all work. (25 points total for problem)
Cash on
hand $500
Bank credit card
balance 5,000
Auto loan
balance
20,000
Mortgage
150,000
Primary residence (FMV) 225,000
Jewelry
1,000
Stocks
10,000
Stamp
collection
1,500
2010
Acura
20,000

3. (TCO B) Jack has taxable income of $65,000. He
is a single tax filer, and his federal income tax rates on the first $8,350 is
10%; it is 15% on income from $8,350 to $33,950 and 25% on income from $33,950
up to $82,250. What is Jack’s federal income tax liability, what is his
marginal rate, and why would he care? Finally, what is his average federal tax
rate? (10 points for each part of the question for a total of 30 points)
Show all of your work for full credit.
1.(TCO A) Use future or present value techniques to
solve the following problems.(Note: You can use tables or a financial calculator. If you use a
calculator, please provide the inputs you used to solve the problems.) (5
points each = total 20 points)a. Starting with $20,000, how much will you have in 20 years if
you can earn 5% on your money?
b. If you inherited $100,000 today and invested all of it in a security that
paid an 8% rate of return, how much would you have in 15 years?
c. If the average new home costs $200,000 today, what will be the value in 10
years if inflation is 4% per year?
d. If you can earn 9% per year, how much will you have to save each year if you
want to retire in 40 years with $3 million?2. (TCO A) Construct a balance sheet for the Jones
family from the following information. Be sure the format is correct. (20
points for balance sheet)
Is the Jones family solvent or insolvent? Explain. (5 points)
Show all work. (25 points total for problem)Cash on
hand $500
Bank credit card
balance 5,000
Auto loan
balance
20,000
Mortgage
150,000
Primary residence (FMV) 225,000
Jewelry
1,000
Stocks
10,000
Stamp
collection
1,500
2010
Acura
20,0003. (TCO B) Jack has taxable income of $65,000. He
is a single tax filer, and his federal income tax rates on the first $8,350 is
10%; it is 15% on income from $8,350 to $33,950 and 25% on income from $33,950
up to $82,250. What is Jack’s federal income tax liability, what is his
marginal rate, and why would he care? Finally, what is his average federal tax
rate? (10 points for each part of the question for a total of 30 points)
Show all of your work for full credit.