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The study of personal finance involves how people _ their financial resources.
Selectone:
a.spend
b.save
c.invest
d.all of these
Feedback
Youransweriscorrect.
Thecorrectansweris:all of thes

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Securities are made up of
Selectone:
a.
Stocks
b.bonds.
c.mutual funds
d.All of these
Feedback
Youransweriscorrect.
Thecorrectansweris:All of these
Question 2
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You would want to lock-in your mortgage interest rate if you expect rates to decline before the closing
Selectone:
True
False
Feedback
Thecorrectansweris'False'.
Question 2
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Question 1
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Consumer credit can take the form of an installment loan that is repaid in _ payments over a _
period of time.
Selectone:
a.variable; variable
b.equal; set
c.increasing; set
d.decreasing; v

Question 1
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Refer to Figure 9-1. Assuming the taxes and insurance on this home will be $150 per month and the
lender requires a front-end ratio of 0.31, how much will Janice and Roland's monthly gross

Collecting a Debt
You lent your friend $1,000. They offer to make
monthly payments of $16.67 for 5 years, or pay you
$950 right now. If the annual interest rate is 3.5%,
which options is best? Use the Present Value (PV)
function to determine your answer.

NPV and IRR Functions
NPV and IRR, help you calculate the value of a
proposed capital budgeting investment. The
time value of money calculations are integrated
with NPV and IRR in Excel. A company is
considering the purchase of a machine that
costs $60,00

Future Value example
Future value is a Time Value of Money calculation. Future value answers questions such as, "If I invest a
certain amount of money each month, given the market interest rate for that type of investment, what
the investment will be wort

Number to Make
Unit Profits
Aqua-Spa Hydro-Lux
0
0
$350
$300
Total Profits
0
Used
pumps required
labor required
tubing required
1
9
12
1
6
16
Available
0
0
0
200
1566
2800

Amount someone ows you
Annual Interest Rate
Number of payments per year
Interest rate per period
Number of years to pay
Number of payments
Payment Amount
Total amount of payments
Present Value of payments
Amount they offer you today
$1,000
3.50%
12
0.2916

Year 0 Year 1 Year 2 Year 3
Operating cash flows
#
#
#
Investing cash f -$60,000
#
Total cash flows-$60,000
#
#
#
Required Rate o 8.50%
Net Present Val $54,951
Total Net Prese -$5,049
Internal Rate of 4.31%

Annual interest rate
7%
Monthly interest rate 0.0058333333
Number of years
40
Number of months
480
Monthly deposit
-400
Future Value
$1,049,925.36
I will have $1,049,925.36 when I retire.
Number to Make
Unit Profit
Tahoe
Pacific
Savannah Aspen
23
15
39
0

Name
Credit Hours
Class Registration Date
Annie
43
Sophomores
Nov 13 2014
Johny
16
Freshmen
Nov 15 2014
Ricky
69
Junior
Nov 15 2014
Rosana
11
Freshmen
Nov 15 2014
Nana
27
Freshmen
Nov 15 2014
Kaylee
22
Freshmen
Nov 15 2014
Chi
42
Sophomores
Nov 13 2014
Si

Solver example
A company sells two models of hot tubs: the Aqua-Spa and the Hydro-Lux.
The company purchases prefabricated fiberglass hot tub shells and installs a common water
pump and the appropriate amount of tubing into each hot tub. Every Aqua-Spa

Amount someone owes you
Annual Interest Rate
Number of payments per year
Interest rate per period
Number of years to pay
Number of payments
Payment Amount
Total amount of payments
Present Value of payments
Amount they offer you today
$1,000,000
3.50%
12
0