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1. Jane and Bill Collins have total take-home pay of $5100 a month. Their monthly expenses total $4050. Calculate the minimum amount this couple needs
1. Jane and Bill Collins have total take-home pay of $5100 a month. Their monthly expenses total $4050. Calculate the minimum amount this couple needs to establish an emergency fund. (LO11.1)
- Use the information in the Figure It Out! box earlier in this chapter to complete the following table. (LO11.1)
Annual Deposit | Rate of Return | Number of Years | Investment Value at the End of Time Period (derived from the table in the Figure It Out feature) | Total Amount of Investment = Annual Deposit x Number of years | Total Amount of Earnings = Investment Value at the End of Time Period Total Amount of Investment |
$2,000 | 2% | 10 |
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$2,000 | 8% | 10 |
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$2,000 | 4% | 30 |
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$2,000 | 11% | 30 |
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- Assume you are in the 28 percent tax bracket and purchase a 3.10 percent municipal bond. Use the formula presented in this chapter to calculate the taxable equivalent yield for this investment. (LO11.4)
- Assume you are in the 35 percent tax bracket and purchase a 3.60 percent municipal bond. Use the formula presented in this chapter to calculate the taxable equivalent yield for this investment. (LO11.4)
- Three years ago, you purchased a corporate bond that pays 5.8 percent. The purchase price was $1,000. What is the annual dollar amount of interest that you receive from your bond investment? (LO11.5)
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