1- Comparing compounding periods Personal Finance Problem Ren Levin wishes to determine the future value at the end of 9 years of a $15,000 deposit made today into an account paying a nominal annual rate of 8%..

a.Find the future value of Ren's deposit, assuming that interest is compounded (1) annually, (2) quarterly, (3) monthly, and (4) continuously.

b. Compare your findings in part a, and use them to demonstrate the relationship between compounding frequency and future value.

c.What is the maximum future value obtainable given the $15,000 deposit, the 9-year time period, and the 8%

Nominal annualrate? Use your findings in part a to explain.

2- Preparation of cash budget. Personal finance problem Sam and Suzy Sizeman need to prepare a cash budget for the last quarter of 2016 in order to make sure they can cover their expenditures during the period. Sam and Suzy have been preparing budgets for the past several years and have been able to establish specific percentages for most of their cash outflows. These percentages are based on their take-home pay (that is., monthly utilities normally run 4.8% of monthly take-home pay). The information here can be used to create their fourth-quarter budget for 2016.

Income

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Monthly take-home pay

$ $4,898

Expenses

Housing

30.1%

Utilities

4.8%

Food

9.9%

Transportation

6.9%

Medical/dental

0.5%

Clothing for October & November

3.1%

Clothing for December

$448

Property taxes (November only)

11.1%

Appliances

1.2%

Personal Care

2.3%

Entertainment for October & November

6.4%

Entertainment for December

$1,537

Savings

7.1%

Other

4.9%

Excess in cash

4.1%

LOADING...

a. Prepare a quarterly cash budget for Sam and Suzy covering the months October through December 2016.

b. Are there individual months that incur adeficit?

c. What is the cumulative cash surplus or deficit by the end of December2016?

a. Complete the October 2016 cash budget below:(Round to the nearest dollar.)	Save Accounting Table...		+
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Sam and Suzy Sizeman
Personal Budget
for the Period October-December 2016
		October
Income
Take-home pay		$
Expenses	Percent
Housing	30.1%	$
Utilities	4.8%	$
Food	9.9%	$
Transportation	6.9%	$
Medical/Dental	0.5%	$
Clothing	3.1%	$
Property taxes	11.1%	$
Appliances	1.2%	$
Personal care	2.3%	$
Entertainment	6.4%	$
Savings	7.1%	$
Other	4.9%	$
Excess cash	4.1%	$
Total expenses		$
Cash surplus or (deficit)		$
Cumulative cash surplus or (deficit)		$

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