# Chapter Assignments

Jaquida Pittman
March 30, 2010
Chapter 14 Assignments
FIN 101
Kathy Ashman

Personal Finance in Practice

Year 1= (2500*10% = 250) 250 + 2500 = 2750
2 = (2750+2500 = 5250 x 10%=525) 525 + 5250 = 5775
3 = (5775+2500 = 8275 * 10%= 828) 828+ 8275 = 9103
4 = (9103+2500 = 11603 * 10%= 1160) 1160 + 11603 =12763
5 = (12763+2500 = 15263 * 10%= 1526) 1526 + 15263 = 16789
6 = (16789+2500 = 19289 * 10%= 1929) 1929 + 19289 = 21218
7 = (21218+2500 = 23718 *10%= 2372) 2372 + 23718 = 26090
8 = (26090+2500 = 28590 *10%= 2859) 2859 + 28590 = 31449
9 = (31449+2500 = 33949 *10%= 3395) 3395 + 33949 = 37344
10 = (37344+2500 = 39844 *10%= 3984) 3984 + 39844 = 43828
Most of the answers starting with the third year are rounded.

Problems

1.   Total Assets   \$108,800
-_ Total Liabilities \$16,300
Net Worth         \$92,500

3.         Total Assets \$427,000
- Total Liabilities \$111,000
Net Worth         \$316,000

6. a) 40 years = \$5,000 * 21.725( 40 year interest @ 8%)     \$108,625
Social Security payments \$15,000 * 40 years                 \$600,000
+ Amount in IRA account                                                   \$     5,000
Janine’s IRA will be worth                                             \$713,625

b) Janine would have to accumulate \$161,375 in her company’s 401(k) plan
in order to reach her retirement income goal.

8. You would have to withdrawal \$340 a month to reduce this nest egg to zero in
in 20 years

You can withdrawal \$230 per month for as long as you live and still leave this
nest egg intact.

Question

1. I would probably spend
4% Other expenses
5% Personal insurance and pensions
4% Entertainment
2% Contribution
8% Clothing and personal care
14% Medical care
14% Food...