Analysis: For the Thomas Family Assume that they could afford to make the same extra payments as the Jeffersons, but instead they decide to put that money (#2a. from Procedures above) into a savings plan called an annuity. Use the Future Value mini financial calculator of the Financial Toolbox spreadsheet to calculate how much they will have in their savings plan at the end of 30 years at the various interest rates. Write your answers (to the nearest dollar) in the appropriate cells of the table below. For the Jefferson Family: Assume that they save nothing until their loan is paid off, but then after their debt is paid, they start putting their monthly payment and 1/12 (#2b. from Procedures above) into a saving plan. The time in months they invest is equal to 360 months minus the number of months needed to pay off the loan (83 from Procedures above) multiplied by 12. Use the Future Value mini financial calculator to calculate how much they will have in their savings plan at the various interest rates. Write your answers (to the nearest dollar) in the appropriate cells of the table below. Thema Family 12 or Monthly Payment Rates Molly Paymester 10 19 2 19 2 N 9% % Discussion: 1. What generalizations can you make from the annuity amounts reflected in the analysis table above with regards to the different strategies taken by the families? That is from a purely financial aspect of the calculations in your table what generalizations could you make regarding the two different strategies? Answer: 2. What assumptions may not necessarily be valid for a typical family regarding both the loan rate and savings plan rate? An Discussion: 1. What generalizations can you make from the annuity amounts reflected in the analysis table above with regards to the different strategies taken by the families? That is, from a purely financial aspect of the calculations in your table what generalizations could you make regarding the two different strategies? Answer: What assumptions may not necessarily be valid for a typical family regarding both the loan rate and savings plan rate? Answer: 3. Discuss some basic pros and cons to these two very different approaches the Thomas and Jefferson families made with their extra monthly payment. Consider various ideas such as possible changes in the family's employment situation, market performance, tax deductions, etc. Answer: 4. Comment on the merits of the advice you read from the two financial columnists. Answer: Note the datar Thu H . Analysis: For the Thomas Family Assume that they could afford to make the same extra payments as the Jeffersons, but instead they decide to put that money (#2a. from Procedures above) into a savings plan called an annuity. Use the Future Value mini financial calculator of the Financial Toolbox spreadsheet to calculate how much they will have in their savings plan at the end of 30 years at the various interest rates. Write your answers (to the nearest dollar) in the appropriate cells of the table below. For the Jefferson Family: Assume that they save nothing until their loan is paid off, but then after their debt is paid, they start putting their monthly payment and 1/12 (#2b. from Procedures above) into a saving plan. The time in months they invest is equal to 360 months minus the number of months needed to pay off the loan (83 from Procedures above) multiplied by 12. Use the Future Value mini financial calculator to calculate how much they will have in their savings plan at the various interest rates. Write your answers (to the nearest dollar) in the appropriate cells of the table below. Thema Family 12 or Monthly Payment Rates Molly Paymester 10 19 2 19 2 N 9% % Discussion: 1. What generalizations can you make from the annuity amounts reflected in the analysis table above with regards to the different strategies taken by the families? That is from a purely financial aspect of the calculations in your table what generalizations could you make regarding the two different strategies? Answer: 2. What assumptions may not necessarily be valid for a typical family regarding both the loan rate and savings plan rate? An Discussion: 1. What generalizations can you make from the annuity amounts reflected in the analysis table above with regards to the different strategies taken by the families? That is, from a purely financial aspect of the calculations in your table what generalizations could you make regarding the two different strategies? Answer: What assumptions may not necessarily be valid for a typical family regarding both the loan rate and savings plan rate? Answer: 3. Discuss some basic pros and cons to these two very different approaches the Thomas and Jefferson families made with their extra monthly payment. Consider various ideas such as possible changes in the family's employment situation, market performance, tax deductions, etc. Answer: 4. Comment on the merits of the advice you read from the two financial columnists. Answer: Note the datar Thu H
