1 What are the main components of personal financial planning? Solve What is the purpose of a financial plan? Solve Identify some common actions taken to achieve financial goals. How does a job differ from a career? Solve What opportunity costs are associated with career decisions? Solve

Q.8

1 What skills would be of value in most employment situations? Solve What are some demographic and economic factors that affect career opportunities? Solve How does technology affect available employment positions? Solve How can a person obtain employment-related experiences without working in a job situation? Solve What types of career information sources can be helpful in identifying job opportunities? Solve

Q.9

1 How does a persons life situation determine the importance of certain employee benefits? Solve What methods can be used to measure the monetary value of employee benefits? SolveWhat types of activities would you recommend for people who desire career advancement and professional growth? Solve What factors should a person consider before changing jobs or career fields? Solve

Q.10

1 What opportunity costs are associated with money management activities? Solve

2 What are the three major money management activities? Solve What are the benefits of an organized system of financial records and documents? Solve What suggestions would you give for creating a system for organizing and storing financial records and documents? Solve What influences the length of time you should keep financial records and documents? Solve

Q.11

1 What are the main purposes of personal financial statements? Solve

2 What does a personal balance sheet tell about your financial situation? Solve How can you use a balance sheet for personal financial planning? Solve What information does a cash flow statement present? Solve What are the main purposes of a budget? Solve

6 How does a persons life situation affect goal setting and amounts allocated for various budget categories? Solve

Q.13

1 What are the main steps in creating a budget? Solve

2 What are commonly recommended qualities of a successful budget? Solve What actions might you take when evaluating your budgeting program? Solve What are some suggested methods to make saving easy? Solve What methods are available to calculate amounts needed to reach savings goals? Solve

Q.14

1 How should you consider taxes in your financial planning? Solve What types of taxes do people frequently overlook when making financial decisions? Solve How does tax-exempt income differ from tax-deferred income? Solve What information is needed to compute taxable income? Solve When would you use the standard deduction instead of itemized deductions? Solve

6 What is the difference between your marginal tax rate and your average tax rate? Solve

Q. 15

1 How does a tax credit affect the amount owed for federal income tax? Solve In what ways does your filing status affect preparation of your federal income tax return? Solve What factors affect your choice of a 1040 form? Solve What are the main sources available to help people prepare their taxes? Solve What actions can reduce the chances of an IRS audit? Solve

6 What appeal process do taxpayers have if they disagree with an audit decision of the IRS? Solve

Q.16

1 How does tax avoidance differ from tax evasion? Solve What common tax-saving methods are available to most individuals and households? Solve What is the relationship between financial services and overall financial planning? Solve What are the major categories of financial services? Solve What financial services are available through electronic banking systems? Solve

6 Why shouldnt you select financial services only on the basis of monetary factors? Solve

Q.17

1 How do changing economic conditions affect the use of financial services? Solve What are examples of deposit financial institutions? Solve What factors do consumers usually consider when selecting a financial institution to meet their saving and checking needs? SolveWhat are the main types of savings plans offered by financial institutions? Solve How does a money market account differ from a money market fund? Solve

Q.18

1 What are the benefits of U.S. savings bonds? Solve When would you prefer a savings plan with high liquidity over one with a high rate of return? Solve What is the relationship between compounding and the future value of an amount? Solve How do inflation and taxes affect earnings on savings? Solve What factors are commonly considered when selecting a checking account? Solve

Q.19

1 Are checking accounts that earn interest preferable to regular checking accounts? Solve Why or why not? Solve What is consumer credit? Solve Why is consumer credit important to our economy? Solve What are the uses and misuses of credit? Solve What are the advantages and disadvantages of credit? Solve

Q.20

1 What are the two main types of consumer credit? Solve What is a debit card? Solve 3 What is a home equity loan? Solve What are the general rules for measuring credit capacity? Solve What can happen if you cosign a loan? Solve What can you do to build and maintain your credit rating? Solve

6 What is the Fair Credit Reporting Act? Solve

Q.21

1 How do you correct erroneous information in your credit file? Solve 6 What are your legal remedies if a credit reporting agency engages in unfair reporting practices? Solve What is the Equal Credit Opportunity Act? Solve What are the five Cs of credit? Solve

What can you do if your credit application is denied? Solve What is the Fair Credit Billing Act? Solve

6 What must you do to protect your rights if a billing error occurs? Solve

Q.22

1 What happens to your credit rating during the billing dispute? Solve What can you do if your identity is stolen? SolveWhat federal laws protect you if you have a complaint regarding consumer credit? Solve What are your rights under the consumer credit laws? SolveWhat are the major sources of consumer credit? Solve

Q.23

1 What are some advantages and disadvantages of securing a loan from a credit union? Solve From a finance company? Solve Distinguish between the finance charge and the annual percentage rate. What are the three variations of the simple interest formula? Solve Distinguish among the adjusted balance, previous balance, and average daily balance methods of calculating the cost of open-end credit. What is the rule of 78s? Solve

Q.24

1 What is the Fair Debt Collection Practices Act? Solve

2 What are the most frequent reasons for indebtedness? Solve What are common danger signals of potential debt problems? SolveWhat is the Consumer Credit Counseling Service? Solve What are the two major activities of the Consumer Credit Counseling Service? Solve

Q.25

1 What options other than the CCCS do consumers have for financial counseling? Solve What is the purpose of Chapter 7 bankruptcy? Solve What is the difference between Chapter 7 and Chapter 13 bankruptcy? Solve How does bankruptcy affect your job and future credit? Solve What are the costs of declaring bankruptcy? Solve

Q.26

1 What factors commonly influence a persons daily buying choices? Solve

2 How are daily buying decisions related to overall financial planning? Solve What types of brands are commonly available to consumers? Solve In what situations can comparing prices help in purchasing decisions? Solve How does a service contract differ from a warranty? Solve What rights do purchasers of products have even if no written warranty exists? Solve

Q.27

1What are the major sources of consumer information? Solve What actions are appropriate when buying a used car? Solve When might leasing a motor vehicle be appropriate? Solve What maintenance activities could increase the life of your vehicle? Solve What are common causes of consumer problems and complaints? Solve

Q.28

1How can most consumer complaints be resolved? Solve 3 How does arbitration differ from mediation? Solve In what types of situations would small claims court and class-action suits be helpful? Solve Describe some situations in which you might use the services of a lawyer. How does a persons employment and household situation influence the selection of housing? Solve What are some common opportunity costs associated with the selection of housing? Solve

Q.29

1 What are the main benefits and drawbacks of renting a place of residence? Solve Which components of a lease are likely to be most negotiable? SolveWhat are the advantages and disadvantages of owning a home? Solve What guidelines can be used to determine the amount to spend for a home purchase? SolveHow can the quality of a school system benefit even homeowners in a community who do not have school-age children? Solve

Q.30

1What services are available to home buyers from real estate agents? Solve

2 How does a sellers market differ from a buyers market? Solve What are the main sources of money for a down payment? Solve What factors affect a persons ability to qualify for a mortgage? Solve How do changing interest rates affect the amount of mortgage a person can afford? Solve

Q.31

1 How do discount points affect the cost of a mortgage? Solve

2 Under what conditions might an adjustable-rate mortgage be appropriate? Solve When might refinancing a mortgage be advisable? Solve How do closing costs affect a persons ability to afford a home purchase? Solve What actions are recommended when planning to sell your home? Solve

6 What factors affect the selling price of a home? Solve

Q.32

1What is the purpose of insurance? Solve How are the most common risks classified? Solve What is the difference between pure risk and speculative risk? Solve What are the methods of managing risk? Solve What are the steps in planning your personal insurance coverage? Solve

Q.33

1What property and liability risks might some people overlook? Solve How could a persons life situation influence the need for certain types of property and liability insurance? SolveWhat main coverages are included in home insurance policies? Solve What is the purpose of personal liability coverage? Solve How does renters insurance differ from other home insurance policies? Solve

Q.34

1 What is the purpose of financial responsibility laws? Solve

2 What are the main coverages included in most automobile insurance policies? Solve What is no-fault insurance? Solve How does collision coverage differ from comprehensive physical damage coverage? Solve What factors influence how much a person pays for automobile insurance? Solve

6 What actions can a person take to reduce the cost of automobile insurance? Solve

Q.35

1What are the reasons for rising health care expenditures? Solve What are various groups doing to curb the high costs of health care? Solve What can individuals do to reduce health care costs? Solve What is health insurance, and what is its purpose? Solve What are group health and individual health insurance? Solve

6 What is a coordination of benefits provision? Solve

Q.36

1 What are several types of health insurance coverage available under group and individual policies? Solve

2 What are the major provisions of a health insurance policy? Solve How do you decide which coverage to choose? Solve 4 How can you analyze the costs and benefits of your health insurance policy? SolveWhat are the major sources of health insurance and health care? Solve What are Blue Cross and Blue Shield plans? Solve What benefits does each plan provide? Solve

Q.37

1 What are the differences among HMOs, PPOs, EPOs, and POSs? Solve

2 What are home health care agencies? Solve What are employer self-funded health plans? Solve What are the two sources of government health insurance? Solve What benefits do Part A and Part B of Medicare provide? Solve

6 What is medigap, or MedSup, insurance? Solve

Q.38

1 What is disability income insurance? Solve What are the three main sources of disability income? Solve How can you determine the amount of disability income insurance you need? Solve How can the Internet help you create a life insurance plan? SolveWhat is the meaning of life insurance? Solve

6 What is the purpose of life insurance? Solve

Q.39

1 What is the principle of life insurance? Solve

2 What do life expectancy tables indicate? Solve How do you determine the need for life insurance? Solve What determines your life insurance objectives? Solve What are the four methods of estimating your life insurance requirements? Solve

Q.40

1 What are the two types of life insurance companies? Solve

2 What are the major types and subtypes of life insurance? Solve What are the most common provisions in life insurance contracts? SolveWhat is a beneficiary? Solve What is a rider? Solve

6 What is the concept of double indemnity? Solve

Q.41

1 How do insurance companies price their products? Solve How do insurance companies determine your insurability? Solve What should you do in examining a policy before and after the purchase? Solve What are the four most common settlement options? Solve Should you switch life insurance policies? Solve

Q.42

1 What is an annuity? Solve Why do people buy annuities? Solve How are annuities taxed? SolveWhy should an investor develop specific investment goals? Solve What factors should you consider when performing a financial checkup? Solve

6 Explain the time value of money concept and how it affects your investment program.

Q.43

1 In your own words, describe the riskreturn trade-off. What are the five components of the risk factor? Solve How do income, growth, and liquidity affect the choice of an investment? Solve How can asset allocation help you build an investment program to reach your financial goals? Solve How do the time your investments have to work for you and your age affect your investment program? Solve

6 Of all the investment alternatives presented in this chapter, which one do you think would help you obtain your investment goals? Solve Explain your answer.

Q.44

1 What is your role in the investment process? Solve

2 Why should you monitor the value of your investment? Solve Assume that you have $10,000 that can be invested. Would you make your own decisions or seek professional help? Solve Explain your answer. What do you think is the most readily available source of information for the average investor? Solve What type of information can you obtain using the Internet? Solve

Q.44

1Briefly describe the additional sources of information you can use to evaluate a potential investment and lessen risk. Why do corporations issue common stock? Solve Describe the two reasons why investors purchase common stock. Why do corporations split their stock? Solve Is a stock split good or bad for investors? Solve What is the most important priority a preferred stockholder has compared to common stockholders? Solve

Q.45

1How would you define ( a ) a blue-chip stock, ( b ) a cyclical stock, ( c ) a defensive stock, ( d ) a growth stock, ( e ) an income stock, ( f ) a large-cap stock, ( g ) a microcap stock, ( h ) a midcap stock, ( i ) a penny stock, and ( j ) a small-cap stock. Which type of stock could help you obtain your investment and financial goals? Solve Justify your choice. What sources of information would you use to evaluate a stock issue? Solve Explain the relationship between earnings and a stocks market value. Why are earnings per share and price-earnings calculations important? Solve

6 What are the formulas for dividend payout, dividend yield, total return, annualized holding period yield, book value, and market-to-book ratio? Solve

Q.46

1 What is the difference between the primary market and the secondary market? Solve

2 Describe the types of orders that are used to buy or sell stocks in the secondary market. Assume you want to purchase stock. Would you use a full-service broker or a discount broker? Solve How can an investor make money using the buy-and-hold technique? Solve What is the advantage of using dollar cost averaging? Solve

6 Explain the difference between direct investment plans and dividend reinvestment plans.

Q.47

1Why would an investor buy stock on margin? Solve Why would an investor use the selling-short technique? SolveWhat is the usual face value for a corporate bond? Solve In your own words, define maturity date and bond indenture. How does a trustee evaluate the provisions contained in a bond indenture? Solve

Q.48

1Why do corporations sell bonds? Solve

2 What are the differences among a debenture, a mortgage bond, and a subordinated debenture? Solve Why would an investor purchase a convertible bond or a high-yield bond? Solve Describe three reasons a corporation would sell convertible bonds. Explain the methods corporations can use to repay a bond issue.

Q.49

1Describe the three reasons investors purchase bonds. What are the differences among a registered bond, registered coupon bond, a bearer bond, and a zero-coupon bond? Solve In what ways can interest rates in the economy affect the price of a corporate bond? Solve Why is the value of a bond closely tied to the issuing corporations ability to repay its bond indebtedness? Solve How are corporate bonds bought and sold? Solve

Q.50

1 What are the maturities for a Treasury bill, a Treasury note, and a Treasury bond? Solve What is the difference between a general obligation bond and a revenue bond? Solve What risks are involved when investing in municipal bonds? Solve What type of information is contained on a corporations Web site? Solve How could this information be used to evaluate a bond issue? Solve What is the market value for a bond with a face value of $1,000 and a newspaper quotation of 77? Solve

Q.51

1How important are bond ratings when evaluating a bond issue? Solve

2Why should you calculate the current yield and yield to maturity on a bond investment? Solve How can business periodicals and government publications help you evaluate a bond issue? Solve What are two major reasons investors purchase mutual funds? Solve

6 How do a closed-end fund, an open-end fund, and an exchange-traded fund differ? Solve

Q.52

1 What are the typical sales fees charged for load and no-load mutual funds? Solve What is the difference among Class A, B, and C shares? Solve What are the typical management fees, 12b-1 fees, and expense ratios? SolveHow important is the investment objective as stated in a funds prospectus? Solve Why do you think fund managers offer so many different kinds of funds? Solve

Q.53

1What is a family of funds? Solve How is it related to shareholder exchanges? Solve Many financial experts say that purchasing a mutual fund is too easy. Do you think this statement is true or false? Solve Explain. In your own words, describe the difference between a managed fund and an index fund. Which fund would you choose for your investment program? SolveHow can the following help you evaluate a mutual fund? Solve

a. The Internet

b. The prospectus

c. Professional advisory services

d. The annual report

e. Newspapers

f. Financial publications

Q.54

1How can you make money when investing in mutual funds? Solve What are the differences among income dividends, capital gain distributions, and capital gains? Solve How would you purchase a closed-end fund? Solve An exchange-traded fund? Solve What options can you use to purchase shares in an open-end mutual fund from an investment company? Solve What options can you use to withdraw money from an open-end mutual fund? Solve

Q.55

1What are four examples of direct investments in real estate? Solve What are four examples of indirect investments in real estate? Solve What is a syndicate? Solve An REIT? Solve A participation certificate (PC)? Solve What are the advantages of real estate investments? Solve How is financial leverage calculated? Solve

Q.56

1 What are the disadvantages of real estate investments? Solve

2 What depreciation method is used for residential real estate? Solve What are several methods for buying precious metals? Solve Why do precious stones appeal to investors? Solve What are collectibles? Solve

6 How can you protect yourself from fraudulent practices in the collectibles market? Solve

Q.57

1How can the Internet assist you in retirement planning? Solve

2 Why is retirement planning important? Solve What are the four basic steps in retirement planning? Solve How can you calculate your net worth today and at retirement? SolveWhat assets are considered marital assets? Solve

Q.58

1 How can you estimate the amount of money you will need during retirement? Solve What expenses are likely to increase or decrease during retirement? Solve How might you adjust your expenses for inflation? SolveWhat are some housing options for retirees? Solve How can retirees avoid retirement housing traps? Solve

Q.59

1 What are possible sources of income for retirees? Solve

2 What are examples of defined-contribution plans? Solve How do they differ from defined-benefit plans? Solve What are the two most popular personal retirement plans? Solve What are annuities? Solve What options are available in annuities? Solve Which option is best? Solve What is the first step in stretching your retirement income? Solve

6 How should you invest to obtain retirement income? Solve

Q.60

1 If you needed information about estate planning, would you go to the library or the Internet? Solve Why? Solve Why is estate planning an important component of financial planning? Solve Why is estate planning important for single as well as married individuals? Solve For new lifestyle individuals? Solve What are the legal aspects of estate planning? Solve What is a will? Solve Why is it an important estate planning tool? Solve

6 How does marriage or divorce affect a will? Solve

Q.61

1 Distinguish among the four types of wills.

2 What are the two formats of wills? Solve What are the steps in writing your will? Solve What is an ethical will? Solve What is a power of attorney? Solve

6 What is a letter of last instruction? Solve

Q.62

1Differentiate among the various types of trusts.

2 What is included in an estate? Solve What are the three types of joint ownership? SolveWhat are the four types of taxes to consider in planning your estate? Solve How is estate tax calculated? Solve

6 What are the various ways to handle the payment of estate tax? Solve

Q.63

Time value of money calculations are used to determine the value of potential retirement benefits. If a person deposits $1,800 a year in a retirement account earning 6 percent for 20 years, what would be the future value of that account? Solve A non-taxable employee benefit has a greater value than the stated amount. What would be the tax equivalent value of a nontaxable employee benefit of $392? Solve Assume a 30 percent tax rate. The Hamilton household has $145,000 in assets and $63,000 in liabilities. What is the familys net worth? Solve. Harold Daley budgeted $210 for food for the month of July. He spent $227 on food during July. Does he have a budget surplus or deficit, and what amount? Solve

Q.64

A person had $2,345 withheld for federal income taxes, and had a tax liability of $2,410. Would this be a refund or an additional amount due for what amount? Solve

2. Based on the following information, what is the amount of taxable income? Solve

Gross salary, $57,400

Interest earnings, $320

Dividend income, $160

One personal exemption, $3,650

Itemized deductions, $8,730

Q.65

What would be the annual percentage yield (APY) for a savings account that earned $174 on a balance of $3,250 over the past 365 days? Solve

2. If you earned a 4.2 percent return on your savings, with a 15 percent tax rate, what is the after-tax rate of return? Solve Current approximate value of Joshuas home is about $180,000. He still has a $100,000 balance on his mortgage. His bank has agreed to let him borrow 80 percent of the value of his home. What is the maximum home equity line of credit available to Josh? Solve. Audra has a monthly net income of $2,100. She has a house payment of $900 per month, a car loan with payments of $500 per month, a Visa card with payments of $100 per month and a credit card with a local department store with payments of $200 per month. What is Audras debt paymenttoincome ratio? Solve. Hannah has determined that her net worth is $60,000. She has also determined that the face value of her mortgage is $160,000. She has determined that the face value of the rest of her debt is $30,000. What is Hannahs debt-to-equity ratio? Solve

Q.66

Your bankcard has an APR of 18 percent and there is a 2 percent fee for cash advances. The bank starts charging you interest on cash advances immediately. You get a cash advance of $600 on the first day of the month. You get your credit card bill at the end of the month. What is the total finance charge you will pay on this cash advance for the month? Solve You borrowed $1,000 at the stated interest rate of 8 percent. You pay off the loan in one lump sum at the end of the year. What is the approximate annual percentage rate? Solve An item bought on credit with a $60 down payment, and monthly payments of $70 for 36 months, would have a total cost of what amount? Solve A food package with 32 ounces costing $76, would have a unit cost of what amount? Solve

Q.66

What would be the monthly payment for an $180,000, 20-year mortgage at 6 percent? Solve

2. What is the total amount of a 30-year mortgage with monthly payments of $850? Solve A person with homeowners insurance incurs roof damage of $17,000. The policy has a $500 deductible. What amount would the insurance pay for the claim? Solve. A person lost control of the vehicle that was being driven and hit a parked car, and damaged a storefront. The damage to the parked car was $4,300 and the damage to the store was $15,400. If the driver has 50/100/15 vehicle insurance coverage, what amount will the insurance company pay? Solve Is the driver responsible for any of the damages? Solve

Q.67

The MacDonalds family of five has health insurance coverage that pays 75 percent of out-of-hospital expenses after a $600 deductible per person. Mrs. MacDonald incurred doctor and prescription medication expenses of $1,380. What amount would the insurance company pay? Solve kap30697_ch11_346-386.indd 382 ap30697_ch11_346-386.indd 382 29/10/10 10:38 PM 9/10/10 10:38 PMConfirming Pages 383

2. Under Roses PPO, emergency room care at a network hospital is 80 percent covered after the member has met a $300 annual deductible. Assume that Rose went to a hospital within her PPO network and that she has not met her annual deductible yet. Her total emergency room bill was $850. What amount did Rose have to pay? Solve What amount did the PPO cover? Solve

Q.68

Suppose that yours is a typical family. Your annual income is $60,000. Use the easy method to determine your need for life insurance.

2. Using the nonworking spouse method, what should be the life insurance needs for a family whose youngest child is two years old? Solve. Suppose your annual premium for a $20,000, 20-year limited-payment policy is $420 over the 20-year period. The cash value of your policy at the end of 20 years is $9,200. Assume that you could have invested the annual premium in a mutual fund yielding seven percent annually. What is the net cost of your insurance for the 20-year period? Solve

For Alicia Thompson, the last few years have been a financial nightmare. It all started when she lost her job. Because she had no income and no emergency fund, she began using her credit cards to obtain the cash needed to pay everyday living expenses. Finally, after an exhaustive job search, she has a new job that pays $51,000 a year. While her take-home pay is $2,975, she must now establish an emergency fund, pay off her $7,300 credit card debt, and start saving the money needed to begin an investment program.

a. If monthly expenses are $2,150, how much money should Alicia save for an emergency fund? Solve

b. What steps should Alicia take to pay the $7,300 credit card debt? Solve

c. Alicia has decided that she will save and invest $2,000 a year for the next five years. If her savings and investments earn 4 percent each year, how much money will she have at the end of five years? Solve

Q.69

Matt Jackson purchased a $1,000 corporate bond issued by Chevron Corporation. The annual interest rate for the bond is 4.95 percent.

a. What is the annual interest amount for the Chevron bond? Solve

b. Since the annual interest for this bond is paid every six months or semiannually, how much will Matt receive for his Chevron bond each six months? Solve

c. If comparable, new bonds pay 5.5 percent interest, what is the approximate market value for this bond? Solve Last year, Shanna Young purchased 100 shares of Iowa Farm Implement. During the last 12 months, she received dividends totaling $20 a share. During the 12-month period, the company earned $4.00 a share.

a. For the 12-month period, what is the amount of total dividends that Ms. Young received? Solve

b. If a share of Iowa Farm Implement is selling for $52 a share, what is the dividend yield? Solve

c. What is the dividend payout during this 12-month period? Solve

Q.70

Kristy Nguyen is trying to decide between two different stock investments, and she asks for your help. Information about each investment is below. Company Price per share Annual Dividend After-Tax Income This Year Projected Earnings Next Year Number of Shares Outstanding One Source Manufacturing $24 $0.40 $35 million $39 million 20 million shares Down South Homes $40 $0.56 $122 million $90 million 140 million shares

a. Calculate the dividend yield for each company.

b. Calculate the earnings per share for each company.

c. Calculate the price-earnings (P/E) ratio for each company.

d. Based on this information, which company would you recommend? Solve Four years ago, David Robertson purchased 200 shares of Harrison Microchips. At the time, each share of Harrison Microchips was selling for $40. He also paid a $22 commission when the shares were purchased. Now, four years later, he has decided its time to sell his investment. Harrison Microchips share price when sold was $52.50. In addition, he paid a $34 commission to sell his shares. He also received dividends of $2.20 per share over the four-year investment period.

a. What was the total return for Mr. Robertsons investment? Solve

b. What is the annualized holding yield for his investment? Solve

Q.71

Charlie Nelson is 50 years old and wants to diversify her investment portfolio and must decide if she should invest in tax-free municipal bonds or corporate bonds. The tax-free bonds are highly rated and pay 4.25 percent. The corporate bonds are more speculative and pay 6.5 percent.

a. If Ms. Nelson is in the 33 percent tax bracket, what is the taxable equivalent yield for the municipal bond? Solve

b. If you were Ms. Nelson, would you choose the municipal bonds or corporate bonds? Solve Justify your answer.

Q.72

1 . James Gomez purchased ten $1,000 corporate bonds issued by JCPenney. The annual interest rate for the bonds is 5.65 percent.

a. What is the annual interest amount for each JCPenney bond? Solve

b. If the bonds have a current price quotation of 92, what is the current price of this bond? Solve

c. Given the above information, what is the current yield for a JCPenney bond? Solve

d. If comparable bonds are paying 6.75 percent, what is the approximate market value for your JCPenney bonds? Solve

Q.73

Matt Redburn has decided to invest $1,000 and purchase 52-week T-bills with some excess cash he doesnt need for the next year. He knows that T-bills are discounted securities, but he is confused about the purchase price and current yield and asks for your help.

a. If the T-bill has a stated interest rate of 1, what is the purchase price? Solve

b. What is the current yield for the T-bill? Solve

Q.74

Three years ago, Dorothy Schwartzs mutual fund portfolio was worth $320,000. Now, because of the recent economic crisis, the total of her investment portfolio has decreased to $243,000. Even though she has lost a significant amount of money, she has not changed her investment holdings, which consist of either aggressive growth funds or growth funds.

a. How much money has Ms. Schwartz lost in the last three years? Solve

b. Given the above information, calculate the percentage of lost value.

c. What actions would you take to get her investments back in shape if you were Dorothy Schwartz? Solve

Q.75

Twelve months ago, Bill Crandall purchased 500 shares in the no-load Black Rock Equity Dividend I funda Morningstar 5-star fund that seeks long-term total return and current income. His rationale for choosing this fund was that he wanted a fund that was conservative and highly rated. Each share in the fund cost $18.30. At the end of the year, he received income dividends of $0.09 a share and a capital gain distribution of $0.08 a share. At the end of 12 months, the shares in the fund were selling for $14.40.

a. How much did Mr. Crandall invest in this fund? Solve

b. At the end of 12 months, what is the total return for this fund? Solve

c. What is the percentage of total return? Solve

d. Despite the fact that this fund is a 5-star fund, it decreased in value. What factors led to the decrease in value? Solve

Q.76

You bought a rental property for $150,000 cash. Later you sell the property for $180,000. What was your return on investment? Solve Suppose you invested just $20,000 of your own money and had a $130,000 mortgage with an interest rate of 7.5 percent. After one year you sell the property for $180,000.

a) What is your gross profit? Solve

b) What is your net profit? Solve

c) What is your percent rate of return on investment? Solve. Assume your home is assessed at $200,000. You have a $150,000 loan for 15 years at five percent. Your property tax rate is two percent of the assessed value. Assume you are in a 28 percent federal income tax bracket. By what amount your federal income tax is lowered? Solve Beverly Foster is planning for her retirement. She has determined that her car is worth $10,000, her home is worth $150,000, her personal belongings are worth $100,000, and her stocks and bonds are worth $300,000. She owes $50,000 on her home and $5,000 on her car. Calculate her net worth.

Q.77

Calculate how much money an average older (65 + ) household with an annual income of $32,800 spends on food each year.

2. You have $100,000 in your retirement fund that is earning 5.5 percent per year, compounding quarterly. How many dollars in withdrawals per month would keep your nest egg intact forever? Solve In 2010, you gave $13,000 worth of stock to your best friend. In 2016, the stock is valued at $25,000. a. What was the gift tax in 2010? Solve

b. What is the total amount removed from your estate in 2016? Solve

c. What will be the gift tax in 2016? Solve On December 31, 2009, George gives $13,000 to his son and $13,000 to his sons wife.

Q.78

The Rule of 72 provides a guideline for determining how long it takes your money to double. This rule can also be used to determine your earning rate. If your money is expected to double in 12 years, what is your rate of return? Solve

2. If you desire to have $10,000 in savings eight years from now, what amount would you need to deposit in an account that earns 5percent? Solve Time value of money calculations are used to determine the value of potential retirement benefits. If a person deposits $1,800 a year in a retirement account earning 6 percent for 20 years, what would be the future value of that account? Solve

Q.79

A non-taxable employee benefit has a greater value than the stated amount. What would be the tax equivalent value of a nontaxable employee benefit of $392? Solve Assume a 30 percent tax rate. The Hamilton household has $145,000 in assets and $63,000 in liabilities. What is the familys net worth? Solve. Harold Daley budgeted $210 for food for the month of July. He spent $227 on food during July. Does he have a budget surplus or deficit, and what amount? Solve A person had $2,345 withheld for federal income taxes, and had a tax liability of $2,410. Would this be a refund or an additional amount due for what amount? Solve

Q.80

Based on the following information, what is the amount of taxable income? Solve

Gross salary, $57,400

Interest earnings, $320

Dividend income, $160

One personal exemption, $3,650

Itemized deductions, $8,730 What would be the annual percentage yield (APY) for a savings account that earned $174 on a balance of $3,250 over the past 365 days? Solve If you earned a 4.2 percent return on your savings, with a 15 percent tax rate, what is the after-tax rate of return? Solve

Q.81

Current approximate value of Joshuas home is about $180,000. He still has a $100,000 balance on his mortgage. His bank has agreed to let him borrow 80 percent of the value of his home. What is the maximum home equity line of credit available to Josh? Solve

2. Audra has a monthly net income of $2,100. She has a house payment of $900 per month, a car loan with payments of $500 per month, a Visa card with payments of $100 per month and a credit card with a local department store with payments of $200 per month. What is Audras debt paymenttoincome ratio? Solve. Hannah has determined that her net worth is $60,000. She has also determined that the face value of her mortgage is $160,000. She has determined that the face value of the rest of her debt is $30,000. What is Hannahs debt-to-equity ratio? Solve

Q.82

Your bankcard has an APR of 18 percent and there is a 2 percent fee for cash advances. The bank starts charging you interest on cash advances immediately. You get a cash advance of $600 on the first day of the month. You get your credit card bill at the end of the month. What is the total finance charge you will pay on this cash advance for the month? Solve You borrowed $1,000 at the stated interest rate of 8 percent. You pay off the loan in one lump sum at the end of the year. What is the approximate annual percentage rate? Solve A food package with 32 ounces costing $76, would have a unit cost of what amount? Solve

Q.83

An item bought on credit with a $60 down payment, and monthly payments of $70 for 36 months, would have a total cost of what amount? Solve What would be the monthly payment for an $180,000, 20-year mortgage at 6 percent? Solve. What is the total amount of a 30-year mortgage with monthly payments of $850? Solve A person with homeowners insurance incurs roof damage of $17,000. The policy has a $500 deductible. What amount would the insurance pay for the claim? Solve

Q.84

A person lost control of the vehicle that was being driven and hit a parked car, and damaged a storefront. The damage to the parked car was $4,300 and the damage to the store was $15,400. If the driver has 50/100/15 vehicle insurance coverage, what amount will the insurance company pay? Solve Is the driver responsible for any of the damages? Solve The MacDonalds family of five has health insurance coverage that pays 75 percent of out-of-hospital expenses after a $600 deductible per person. Mrs. MacDonald incurred doctor and prescription medication expenses of $1,380. What amount would the insurance company pay? Solve Under Roses PPO, emergency room care at a network hospital is 80 percent covered after the member has met a $300 annual deductible. Assume that Rose went to a hospital within her PPO network and that she has not met her annual deductible yet. Her total emergency room bill was $850. What amount did Rose have to pay? Solve What amount did the PPO cover? Solve

Q.85

Gene, an assembly line worker at an automobile manufacturing plant, has take-home pay of $900 a week. He is injured in an accident that kept him off work for 18 weeks. His disability insurance coverage replaces 65 percent of his earnings after a sixweek waiting period. What amount would he receive in disability benefits? Solve Suppose that yours is a typical family. Your annual income is $60,000. Use the easy method to determine your need for life insurance. Using the nonworking spouse method, what should be the life insurance needs for a family whose youngest child is two years old? Solve 3. Suppose your annual premium for a $20,000, 20-year limited-payment policy is $420 over the 20-year period. The cash value of your policy at the end of 20 years is $9,200. Assume that you could have invested the annual premium in a mutual fund yielding seven percent annually. What is the net cost of your insurance for the 20-year period? Solve

Q.86

For Alicia Thompson, the last few years have been a financial nightmare. It all started when she lost her job. Because she had no income and no emergency fund, she began using her credit cards to obtain the cash needed to pay everyday living expenses. Finally, after an exhaustive job search, she has a new job that pays $51,000 a year. While her take-home pay is $2,975, she must now establish an emergency fund, pay off her $7,300 credit card debt, and start saving the money needed to begin an investment program.

a. If monthly expenses are $2,150, how much money should Alicia save for an emergency fund? Solve

b. What steps should Alicia take to pay the $7,300 credit card debt? Solve

c. Alicia has decided that she will save and invest $2,000 a year for the next five years. If her savings and investments earn 4 percent each year, how much money will she have at the end of five years? Solve

2. Matt Jackson purchased a $1,000 corporate bond issued by Chevron Corporation. The annual interest rate for the bond is 4.95 percent.

a. What is the annual interest amount for the Chevron bond? Solve

b. Since the annual interest for this bond is paid every six months or semiannually, how much will Matt receive for his Chevron bond each six months? Solve

c. If comparable, new bonds pay 5.5 percent interest, what is the approximate market value for this bond? Solve

Q.87

Kristy Nguyen is trying to decide between two different stock investments, and she asks for your help. Information about each investment is below.

Company Price per share Annual Dividend After-Tax Income This Year Projected Earnings Next Year Number of Shares Outstanding One Source Manufacturing $24 $0.40 $35 million $39 million 20 million shares Down South Homes $40 $0.56 $122 million $90 million 140 million shares

a. Calculate the dividend yield for each company.

b. Calculate the earnings per share for each company.

c. Calculate the price-earnings (P/E) ratio for each company.

d. Based on this information, which company would you recommend? Solve

Q.88

Last year, Shanna Young purchased 100 shares of Iowa Farm Implement. During the last 12 months, she received dividends totaling $20 a share. During the 12-month period, the company earned $4.00 a share.

a. For the 12-month period, what is the amount of total dividends that Ms. Young received? Solve

b. If a share of Iowa Farm Implement is selling for $52 a share, what is the dividend yield? Solve Charlie Nelson is 50 years old and wants to diversify her investment portfolio and must decide if she should invest in tax-free municipal bonds or corporate bonds. The tax-free bonds are highly rated and pay 4.25 percent. The corporate bonds are more speculative and pay 6.5 percent.

a. If Ms. Nelson is in the 33 percent tax bracket, what is the taxable equivalent yield for the municipal bond? Solve

b. If you were Ms. Nelson, would you choose the municipal bonds or corporate bonds? Solve Justify your answer.. James Gomez purchased ten $1,000 corporate bonds issued by JCPenney. The annual interest rate for the bonds is 5.65 percent

a. What is the annual interest amount for each JCPenney bond? Solve

b. If the bonds have a current price quotation of 92, what is the current price of this bond? Solve

c. Given the above information, what is the current yield for a JCPenney bond? Solve

d. If comparable bonds are paying 6.75 percent, what is the approximate market value for your JCPenney bonds? Solve

Q.88

Matt Redburn has decided to invest $1,000 and purchase 52-week T-bills with some excess cash he doesnt need for the next year. He knows that T-bills are discounted securities, but he is confused about the purchase price and current yield and asks for your help.

a. If the T-bill has a stated interest rate of 1, what is the purchase price? Solve

b. What is the current yield for the T-bill? Solve Three years ago, Dorothy Schwartzs mutual fund portfolio was worth $320,000. Now, because of the recent economic crisis, the total of her investment portfolio has decreased to $243,000. Even though she has lost a significant amount of money, she has not changed her investment holdings, which consist of either aggressive growth funds or growth funds.

a. How much money has Ms. Schwartz lost in the last three years? Solve

b. Given the above information, calculate the percentage of lost value.

c. What actions would you take to get her investments back in shape if you were Dorothy Schwartz? Solve

Q.89

Twelve months ago, Bill Crandall purchased 500 shares in the no-load Black Rock Equity Dividend I funda Morningstar 5-star fund that seeks long-term total return and current income. His rationale for choosing this fund was that he wanted a fund that was conservative and highly rated. Each share in the fund cost $18.30. At the end of the year, he received income dividends of $0.09 a share and a capital gain distribution of $0.08 a share. At the end of 12 months, the shares in the fund were selling for $14.40.

a. How much did Mr. Crandall invest in this fund? Solve

b. At the end of 12 months, what is the total return for this fund? Solve

c. What is the percentage of total return? Solve

d. Despite the fact that this fund is a 5-star fund, it decreased in value. What factors led to the decrease in value? Solve You bought a rental property for $150,000 cash. Later you sell the property for $180,000. What was your return on investment? Solve

Q.90

Suppose you invested just $20,000 of your own money and had a $130,000 mortgage with an interest rate of 7.5 percent. After one year you sell the property for $180,000.

a) What is your gross profit? Solve

b) What is your net profit? Solve

c) What is your percent rate of return on investment? Solve Assume your home is assessed at $200,000. You have a $150,000 loan for 15 years at five percent. Your property tax rate is two percent of the assessed value. Assume you are in a 28 percent federal income tax bracket. By what amount your federal income tax is lowered? Solve

Q.100

Beverly Foster is planning for her retirement. She has determined that her car is worth $10,000, her home is worth $150,000, her personal belongings are worth $100,000, and her stocks and bonds are worth $300,000. She owes $50,000 on her home and $5,000 on her car. Calculate her net worth. Calculate how much money an average older (65 + ) household with an annual income of $32,800 spends on food each year. . You have $100,000 in your retirement fund that is earning 5.5 percent per year, compounding quarterly. How many dollars in withdrawals per month would keep your nest egg intact forever? Solve

Q.101

In 2010, you gave $13,000 worth of stock to your best friend. In 2016, the stock is valued at $25,000. a. What was the gift tax in 2010? Solve

b. What is the total amount removed from your estate in 2016? Solve

c. What will be the gift tax in 2016? Solve On December 31, 2009, George gives $13,000 to his son and $13,000 to his sons wife. On January 1, 2010, George gives another $13,000 to his son and another $13,000 to his sons wife. George made no other gifts to his son and his son s wife in 2009 and 2010. What is the gift tax? Solve

Q.102

Comparing Financial Planning Actions. Survey friends, relatives, and others to determine the process they use when making financial decisions. How do these people measure risk when making financial decisions? Solve Using Financial Planning Experts. Prepare a list of financial planning specialists (investment advisers, credit counselors, insurance agents, real estate brokers, tax preparers) in your community who can assist people with personal financial planning. Setting Financial Goals. Using Sheet 3 in the Personal Financial Planner, create one short-term and one long-term goal for people in these life situations:

Question (a) a young single person,

(b) a single parent with a child age 8,

(c) a married person with no children,

(d) a retired person. . Analyzing Changing Life Situations. Ask friends, relatives, and others how their spending, saving, and borrowing activities changed when they decided to continue their education, change careers, or have children.

Q.103

Researching Career Planning Activities. Interview a person who recently made a major career change. What personal and economic factors influenced this decision? Solve What specific career planning activities did the person use? Solve

2. Comparing Career Alternatives. Using Sheet 6 in the Personal Financial Planner, research two careers you might consider. Compare employment requirements, duties on the job, and future potential. . Searching the Web for Benefit Information. Using a Web search or the library, obtain information about various employee benefits such as health insurance, retirement plans, child care, life insurance, and tuition reimbursement. . Analyzing Employee Benefits. Using Sheet 12 in the Personal Financial Planner, obtain information about various employee benefits from current or prospective employers. . Obtaining Career Advancement Information. Talk with several people employed in various types of careers (large company, international business, individual entrepreneur, nonprofit, or government). Prepare an outline or other visual presentation describing the training and professional development activities they have found most valuable.

6. Preparing for an Interview. Based on library research, a Web search, and experiences of others, obtain information about effective interviewing techniques. Prepare a video that presents appropriate and inappropriate actions one might take when preparing for and participating in an interview.

Q.104

Researching Money Management Information. Using Web sites, library sources, friends, relatives, and others, obtain information on common suggestions for successful money management.

2. Comparing Financial Record Systems. Conduct a survey of people of various ages to determine the system they use to keep track of various financial documents and records. Creating Personal Financial Statements. Using Sheets 15 and 16 in the Personal Financial Planner, or some other format, prepare a personal balance sheet and cash flow statement. . Researching Money Management Software. Use the Internet, store visits, or advertisements to determine software or Web sites a person might use to prepare personal financial statements, create a budget, and monitor spending, saving, and investing. . Analyzing Budgeting Situations. Discuss with several people how the budget in Exhibit3-7 might be changed based on various budget variances. If the household faced a decline in income, what spending areas might be reduced first? Solve

6. Analyzing Saving Habits. Interview a young single person, a young couple, and a middle-aged person about their financial goals and saving habits. What actions do they take to determine and achieve various financial goals? Solve

Q.105

Searching the Web for Tax Information. Using Web sites such as www.quicken.com , Kiplingers Personal Finance at www .kiplinger.com , or Money magazine at www.money.com , or library resources, obtain information about the tax implications of various financial planning decisions.

2. Planning Your Tax Payment. Survey several people about whether they get a federal tax refund or owe taxes each year. Obtain information about the following:

Question ( a ) Do they usually get a refund or owe taxes when they file their federal tax return? Solve

( b ) Is their situation (refund or payment) planned? Solve

( c ) What are the reasons they want to get a refund each year? Solve

( d ) Are there situations where getting a refund may not be a wise financial decision? Solve Researching Tax Questions. Use IRS publications and other reference materials to answer a specific tax question. Contact an IRS office to obtain an answer for the same question. What differences, if any, exist between the information sources? Solve Comparing Tax Services. Using Sheet 21 in the Personal Financial Planner, obtain information from two different tax preparation companies about the services they offer and the costs of their services. (Obj. 4) 5. Determining Tax Planning Activities. Survey friends and relatives about their tax planning strategies. You may use Sheet 22 from the Personal Financial Planner to obtain questions for your survey.

Q.106

Monitoring Economic Conditions. Research current economic conditions (interest rates, inflation) using The Wall Street Journal, other library resources, or Web sites. Based on current economic conditions, what actions would you recommend to people who are saving and borrowing money? Solve

2. Comparing Financial Institutions. Collect advertisements and promotional information from several financial institutions, or locate the Web sites of financial institutions. Create a list of factors that a person might consider when comparing costs and benefits of various savings plans and payment accounts. . Comparing Savings Plans. Collect online information from several financial institutions about the savings plans they offer. Using Sheet 25 in the Personal Financial Planner, compare the features and potential earnings of two or three savings plans. . Comparing Payment Accounts. Using Sheets 26 and 27 in the Personal Financial Planner, compare the features and costs of checking accounts at two different financial institutions. Online searches of bank Web sites may be useful. . Researching Checking Accounts. Several states require that banks offer basic checking accounts. For example, in Illinois, New York, New Jersey, and Minnesota, check services with minimal fees must be made available for consumers making a limited number of transactions. Obtain information about the availability of these types of lifeline accounts in your area.

Q.107

Determining Whether or Not to Use Credit. Survey friends and relatives to determine the process they used in deciding whether or not to use credit to purchase an automobile or a major appliance. What risks and opportunity costs did they consider? Solve

2. Analyzing Opportunity Costs Using Credit. Think about the last three major purchases you made. (Ob a. Did you pay cash? Solve If so, why? Solve

b. If you paid cash, what opportunity costs were associated with the purchase? Solve

c. Did you use credit? Solve If so, why? Solve

d. What were the financial and psychological opportunity costs of using credit? Solve. Comparing Reasons for Using Credit. Prepare a list of similarities and differences in the reasons the following individuals might have for using credit.

a. A teenager.

b. A young adult.

c. A growing family of four.

d. A retired couple.

Q.108

Using the Internet to Obtain Information about Credit Cards. Choose one of the following organizations and visit its Web site. Then prepare a report that summarizes the information the organization provides. How could this information help you in choosing your credit card? Solve

a. Credit Card Networkprovides information on credit card rates.

b. Federal Trade Commissionprovides information on how to regain financial health, uses and misuses of credit cards, and many other related topics. Determining Whether a Loan Is Needed. Survey friends and relatives to find out what criteria they used to determine the need for credit. . Comparing Costs of Loans from Various Lenders. Prepare a list of sources of inexpensive loans, medium-priced loans, and expensive loans in your area. What are the trade-offs in obtaining a loan from an easy lender? Solve

Q.109

Using Current Information on Obtaining the Best Credit Terms. Choose a current issue of Worth, Money, Kiplingers Personal Finance Magazine, or BusinessWeek and summarize an article that provides suggestions on how you can choose the best, yet least expensive, source of credit.

2. Using the Internet to Obtain Information about the Costs of Credit. As pointed out at the beginning of this chapter, credit costs money; therefore, you must conduct a cost/benefit analysis before making any major purchase. While most people consider credit costs, others simply ignore them and eventually find themselves in financial difficulties. To help consumers avoid this problem, each of the following organizations has a home page on the Internet.

Q.110

Obtaining Consumer Information. Using a Web search, library resources, or a survey of acquaintances, determine the major factors people consider when

( a ) buying food,

( b ) selecting a store at which to shop, and

( c ) using information from advertisements.

2. Comparing Consumer Information Sources. Obtain a recent issue of Consumer Reports (or go to www.ConsumerReports.org ) to evaluate and compare different brands of a product. Also obtain information on this product from people who sell this item and those who have recently purchased it. Compare the information received from these sources. . Comparing Used Cars. Use Sheet 35 in the Personal Financial Planner to compare different sources of used motor vehicles. . Evaluating Motor Vehicle Leases. Use Sheet 36 in the Personal Financial Planner to compare the costs of buying and leasing a motor vehicle. . Identifying and Solving Consumer Problems. Collect print or online advertisements that appear to be too good to be true. Why are these ads deceptive? Solve Should government agencies take action against any of the companies presenting these ads? Solve

Q.111

Comparing Legal Services. Prepare a survey of legal services available to students and others in your community. Use Sheet 39 in the Personal Financial Planner to compare the fees and services provided by lawyers and other sources of legal assistance. Comparing Housing Alternatives. Interview several people about the factors that influenced their current residence.

2. Comparing Rental Situations. Using Sheet 42 in the Personal Financial Planner, compare the costs, facilities, and features of apartments and other rental housing in your area. You may obtain this information through newspaper advertisements, rental offices, or online searches. . Comparing Home-Buying Alternatives. Visit the sales office for a condominium, a new home, and a mobile home. Based on the information obtained, prepare a written or an oral presentation comparing the benefits and potential concerns of these housing alternatives. . Comparing Types of Mortgages. Talk with people who have different types of mortgages. What suggestions do they offer about obtaining home financing? Solve What were their experiences with closing costs when they purchased their homes? Solve

Q.112

Comparing Mortgage Companies. Using Sheet 44 in the Personal Financial Planner, contact several mortgage companies and other financial institutions to obtain information about current mortgage rates, application fees, and the process for obtaining a mortgage. Determining Insurance Coverages. Survey friends and relatives to determine the types of insurance coverages they have. Also, obtain information about the process used to select these coverages. Analyzing Insurance Coverages. Talk to a financial planner or an insurance agent about the financial difficulties faced by people who lack adequate home and auto insurance. What common coverages do many people overlook? Solve . Maintaining a Household Inventory. Survey several people about their household inventory records. In the event of damage or loss, would they be able to prove the value of their personal property and other belongings? Solve

Q.113

Comparing Home Insurance Costs. Contact two or three insurance agents to obtain information about home or renters insurance. Use Sheet 49 in the Personal Financial Planner to compare the coverages and costs.

2. Reducing Home Insurance Costs. Talk to several homeowners about the actions they take to reduce the cost of their home insurance. Locate Web sites that offer information about reducing home insurance costs. Prepare a video or other visual presentation to communicate your findings. . Comparing Auto Insurance Costs. Contact two or three insurance agents to obtain information about automobile insurance. Use Sheet 50 in the Personal Financial Planner to compare costs and coverages for various insurance companies.

Q.114

Planning for Life Insurance. Choose a current issue of Money, Kiplingers Personal Finance, Consumer Reports, or Worth and summarize an article that provides information on human life expectancy and how life insurance may provide financial security.

2. Assessing the Need for Life Insurance. Interview relatives and friends to determine why they purchased life insurance. Prepare an essay summarizing your findings. . Comparing the Methods of Determining Life Insurance Requirements. Analyze the four methods of determining life insurance requirements. Which method is best and why? Solve . Comparing Premiums for Life Insurance Policies. Choose one stock and one mutual life insurance company. Obtain and compare premiums for a. Term life insurance for $50,000. b. Whole life insurance for $50,000. c. Universal life insurance for $50,000. Prepare a summary table indicating which policy you would consider and why.

Q.115

Using Investment Information. Choose a current issue of Kiplingers Personal Finance or Money and summarize an article that provides suggestions on how you could use your money more effectively.

2. Using the Internet to Obtain Information about Money Management. As pointed out at the beginning of this chapter, it doesnt make sense to establish an investment program until credit card and installment purchases are reduced or eliminated. While most people are responsible and make payments when theyre supposed to, some people get in trouble. To help avoid this problem, each of the following organizations has a home page on the Internet: Consumer Credit Counseling Service provides information about how to manage consumer debt ( cccs.net ). Green Path Debt Solutions provides counseling for people with debt problems. ( greenpath.com ). Choose one of the above organizations and visit its