Friday, May 4, 2007

Personal Finance; May 3rd, 2007

The problem that we didn't finish on wednesday is at the bottom picture.

Explaination (Wednesday's Left over question)

If your reading a problem MAKE SURE READ IT 5 times or more UNTIL YOU GET THE QUESTION.

The main question is how much money she will have after her 60th birthday if she's going to start investing money at her 18 years of age. So basically if the question is base about the future you are looking for the FUTURE VALUE. In this problem you will need your TI-83/TI-83 plus go to your TVM_SOLVER.

For " N " = N stands for how many payments Kandi will make. So since she's investing at her age 18 to 60, we basically do the math. We will subract 18 to 60 and the answer will be multiply by 12 since she's doing the payment per month and it gives us 504.

For " I% " = this symbol stands for interest rate. It says the interest is 7.5% and you don't even need to do the math.

For " PV" = means present value. We don't have any present value she just started so 0 ZERO.

For "PMT" = means payment. It says the payment that she's going to make is $ 20/month. So we put 20.

For "P/Y & C/Y" = means payment per year and compounded per year. In this problem it says she's doing the payment per month and compounded monthly so we put 12 in each. REMEMBER THEY ARE NOT ALWAYS THE SAME IN EVERY PROBLEM. ADVICE TO READ IT CAREFULLY.

For "FV" = means the future value. This is what we need to know to solve click [ALPA] [SOLVE].

For answering the question always write it in a sentence OR MR. K WILL NOT ACCEPT YOUR ANSWER!!!

PROBLEM 1 on THURS. May 3rd, 2007.
If your reading a problem MAKE SURE READ IT 5 times or more UNTIL YOU GET THE QUESTION.

For this question we don't even need to use our TVM_Solver. The question ask us how much he will need to pay. If he is going to trade his dodge with a new car. Actually I THINK THERE IS AN ERROR answer on top, because on friday we talked about having the taxes before deducting the down payment or trading.
So it suppose to be $ 22,500 x 1.13(PST&GST) since it's a new car and it gives us $ 25,425. Then $ 25,425 - $ 3,500(his dodge) and it gives us $ 21,925.
Mr. K also talked about Depreciating and Uppreciating. Cars are usually depreciating in 20% every year.
Depreciating - means decreasing of a car's value.
Uppreciating - mean increasing of a car's value.
Right after he explained it to us he asked us question.
What is the value of Jeff's car if it is depreciating with in 5 years?
If depreciating we keep the 80% and we loose 20%. In this question we will multiply 22,500 x .80 and it gives us 18,000. Do this four more times and it gives us $ 7,372.80.

If your reading a problem MAKE SURE READ IT 5 times or more UNTIL YOU GET THE QUESTION.

The question ask us the total repaying of the loan and the interest. In this situation we need our TVM_Solver again!!

"N" = it's already ready for us. N is 24 because determining the monthly payment of repaying the loan with in 2 years.

"I%" = up there the interest is 8.9%.

"PV" = now our PV is not 0 because that's the present value that we are about to look for the monthly payment. So we go put the $8,250 loan.

"P/Y & C/Y" = it's 12 because it says compounded monthly and we need to pay the loan monthly.

"PMT" = NOW!!! we are going to [ALPA] [SOLVE] and the answer is $376.52.

so we are going to multiply 376.52 x 24 and it gives us $9,036.48 for the total of repaying the loan with in 2 years.

the interest is 9,036.48 - 8,250 and it gives us 786.48. So 746.48 is the total interest of the loan for 2 years.

wow.. it's almost 4 hours now and still!!!! my blog is not finish!!!!! sorry sorry for inconvinience the other scribe posts of mine will be also completed soon.


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