Case Study

Jamie Lee Jackson, age $23,$ recently decided to switch from attending college part$-$time to full$-$time in order to pursue her business degree and to graduate within the next three years. She has $55$ credit hours remaining to earn her bachelor's degree. She knows that it will be a challenge to complete her course of study while still working part$-$time in the bakery department of a local grocery store, where she earns $$390$ a week. Jamie Lee wants to keep her part$-$time job, as she loves baking and creates very decorative cakes. She dreams of opening her own cupcake caf$$ within the next five years. She also realizes that by returning to school full time, she will forgo any free time that she enjoys now socializing with friends. Jamie Lee currently shares a small apartment with a friend, and they split the living expenses, such as rent and utilities. She would really like to eventually have a place of her own. Her car is still going strong, even though it is seven years old, and she has no plans to buy a new one any time soon. She is carrying a balance on her credit card and is making regular monthly payments of $$50$ with hopes of paying it off within a year. Jamie recently took out a student loan to cover educational costs and expenses. She also began depositing $$1,800$ a year in a savings account that earns $2$ percent interest, in hopes of having the $$9,000$ down payment needed to start the cupcake caf$$ two years after graduation.

Current Financial Situation

Checking account: $$1,250$

Emergency fund savings account: $$3,100$

Car: $$4,000$

Student loan: $$5,400$

Credit card balance: $$400$

Gross monthly salary: $$2,125$

Net monthly salary: $$1,560$

ULOS

CLO $1)$ Calculate the time value of money.

$($CLO $1)$ Identify strategies for achieving personal financial goals in life situations.

Directions

Read the above case study and answer the

questions below. Upload your work to Canvas by

the deadline.

Questions

$1.$ What are Jamie Lee's short$-$term financial goals? How do they compare to her long$-$term financial goals?

$2.$ Review Jamie Lee's current financial situation. Using the SMART approach, what recommendations would you make for her to achieve her long$-$term goals.

$3.$ Name two opportunity costs that might be considered in Jamie Lee's situation.

$4.$ Jamie Lee plans to deposit $$1,800$ at the end of every year in a regular savings account earning $2$ percent interest. How much will she have accumulated at the end of five years?