Analysis

1. Review the cash flow statement you prepared in Chapter 3 and assess your liquidity in preparation for life after graduation. Cash flow listed below:

I have 42 credits left. I am a full time employee who works six days a week. I am back in school again for the second time to get another degree. I actually have nothing to pay back. Estimating that each year classes will increase in pay. I would pay 1500 per class. 42/3=14 and 1500 x 14 = 21000 left. As of right now since I am working I would pay the tuition from my job so that I wont owe anything after graduation. With the formulas above, 5 yrs is 60 months. 3767.09 is the future amount to save. So monthly savings 60 interest rate 3/12 = 0.25%. So PMT= 309.37. Goal for first year = 15000 nper = 12*6 = 72 with rate being 0.25% so PMT on monthly basis = 190.41. Goal for 2nd year post grad = 15300 nper = 12*7 = 84 rate being 0.25% and PMT monthly = 163.91. Goal for 3rd year post grad = 15606 nper = 12*8=96 rate being 0.25% and PMT monthly is 144.04.

2. Evaluate the short-term goals you created in Chapter 1 as high, medium, or low with respect

to liquidity, risk, fees/minimum balance, and return. and the short term goals are

Planning for early retirement
Increased Income to earn more money
educating myself about personal finance

Short-term Goal Prioritization of Factors

FEES/MINIMUM

SHORT-TERM GOAL

LIQUIDITY

RISK

BALANCE

RETURN

Planning for early retirement

Increased Income to earn more money

educating myself about personal finance

3. Using one of the financial institutions you evaluated in your Scavenger Hunt exercise this week, revisit their web site for information on money market investment products. Rank each of the money market investments as good, fair, or poor with respect to liquidity, risk, fees/minimum balance, and return in meeting your financial goals. Here is the website https://www.pnc.com/en/personal-banking.html?lnksrc=topnav

FEES/MINIMUM

MONEY MARKET INVESTMENT

LIQUIDITY

RISK

BALANCE

RETURN

Checking Account

NOW Account

Savings Account

Money Market Deposit Account (MMDA)

Certificate of Deposit

Treasury Bill

Money Market Fund

Asset Management Account

Decisions

1. Describe how you will ensure adequate liquidity to cover anticipated expenses during college and after graduation.

2. Describe how you will ensure liquidity to meet unanticipated expenses during college and after graduation.

3. Explain which money market investments will be most effective in reaching your short-term goals.