Last 4 digits of CUNYFirst ID BUS 121 - - Name Time Value of Money: Problem Set la Tips: For now, ignore "payment" and "mode" in the TVM calculator app. Problems: 1. Shirin needs to borrow $3.000 and is considering her options. Her bank is offering to lend her the money for 2 van after which she will need to make a single payment to the bank in the amount of $3,500. Her cousin offered to lend her money, too - for 4 years, and the amount Shirin will need to pay back in that case is $3,700. If Shirin's goal is to minimize the cost of her borrowing, which option should she prefer? 2. Leroy's son was just born, and he wants to make sure he puts away enough money for his son's college education. Leroy is thinking a bachelor's degree will cost $170,000, and he wants to have all of that money available when his son turns 18. Leroy opened an account for this purpose and funded it with $55,000. The investments in the account are expected to return 7% a year. a. Assuming no further deposits, will Leroy reach his goal, or will he fall short? b. Instead of $55,000, how much money does he need to deposit into the account now, in order to reach his goal exactly? Annual rate Periods/ years Future value FV Present value PV Kareem is wondering how many years it will take him to accumulate $50,000 to save $1,200 per year. a. How many years will it take, if Kareem saves the money under his mattress? aim to accumulate $50,000 for a house down paymen . Do you think it will take longer, shorter or the same amount of time, if instead he uses an accou some interest? (do not use a calculator) it of time, if instead he uses an account that earns C. With 4% annual interest, how many years will it take Kareem to achieve his goal? 3. Janai, a 23-year-old who just got her first full time job out of college and is already getting all sorts of good id wants to be a millionaire by the time she retires at 67. (You go, girl!) She is wondering how much she needs to sam per year in order to achieve this goal. a. How much does she need to save, if she saves in a non-interest-bearing account? b. If the account yielded some interest, will she need to save less, more or the same amount annually? (do not use a calculator) C. With an interest rate of 6% in the account, how much does she need to save annually? If Janai did not get to her retirement saving right away after college and instead waited a few years, would she have to save less, more or the same amount of money per year to reach her goal? (do not use a calculator) e. If Janai waited 10 years to start her retirement savings program, how much would she have to save per year in the same 6% yielding account, in order to accomplish her goal? # Present value PV Payment Future value FV Annual rate Periods / years Amount You Owe Standard Deduction Standard Deductions Filing Status Standard Deduction Amount 12,200 Single Married Filing Jointly & Surviving Spouse $ 24,400 12,200 Married Filing Separately 18,350 Head of Household Federal Income Tax Rates Taxable income Tax rate Married Filing Jointly Single $0 to $19,400 10% $0 to $9,700 $19,400 to $78,950 12% $9,700 to $39,475 $78,950 to $168,400 $39,475 to $84,200 $168,400 to $321,450 24% $84,200 to $160,725 $321,450 to $408,200 $160,725 to $204,100 $408,200 to $612,350 $204,100 to $510,300 $612,350 and above 37% $510,300 and above ai, a 23 wants to be a per year in order a. How much does b. If the account yielded (do not use a calculator) C. With an interest rat d. If Janai di have Last 4 digits of CUNYFirst ID BUS 121 - - Name Time Value of Money: Problem Set la Tips: For now, ignore "payment" and "mode" in the TVM calculator app. Problems: 1. Shirin needs to borrow $3.000 and is considering her options. Her bank is offering to lend her the money for 2 van after which she will need to make a single payment to the bank in the amount of $3,500. Her cousin offered to lend her money, too - for 4 years, and the amount Shirin will need to pay back in that case is $3,700. If Shirin's goal is to minimize the cost of her borrowing, which option should she prefer? 2. Leroy's son was just born, and he wants to make sure he puts away enough money for his son's college education. Leroy is thinking a bachelor's degree will cost $170,000, and he wants to have all of that money available when his son turns 18. Leroy opened an account for this purpose and funded it with $55,000. The investments in the account are expected to return 7% a year. a. Assuming no further deposits, will Leroy reach his goal, or will he fall short? b. Instead of $55,000, how much money does he need to deposit into the account now, in order to reach his goal exactly? Annual rate Periods/ years Future value FV Present value PV Kareem is wondering how many years it will take him to accumulate $50,000 to save $1,200 per year. a. How many years will it take, if Kareem saves the money under his mattress? aim to accumulate $50,000 for a house down paymen . Do you think it will take longer, shorter or the same amount of time, if instead he uses an accou some interest? (do not use a calculator) it of time, if instead he uses an account that earns C. With 4% annual interest, how many years will it take Kareem to achieve his goal? 3. Janai, a 23-year-old who just got her first full time job out of college and is already getting all sorts of good id wants to be a millionaire by the time she retires at 67. (You go, girl!) She is wondering how much she needs to sam per year in order to achieve this goal. a. How much does she need to save, if she saves in a non-interest-bearing account? b. If the account yielded some interest, will she need to save less, more or the same amount annually? (do not use a calculator) C. With an interest rate of 6% in the account, how much does she need to save annually? If Janai did not get to her retirement saving right away after college and instead waited a few years, would she have to save less, more or the same amount of money per year to reach her goal? (do not use a calculator) e. If Janai waited 10 years to start her retirement savings program, how much would she have to save per year in the same 6% yielding account, in order to accomplish her goal? # Present value PV Payment Future value FV Annual rate Periods / years Amount You Owe Standard Deduction Standard Deductions Filing Status Standard Deduction Amount 12,200 Single Married Filing Jointly & Surviving Spouse $ 24,400 12,200 Married Filing Separately 18,350 Head of Household Federal Income Tax Rates Taxable income Tax rate Married Filing Jointly Single $0 to $19,400 10% $0 to $9,700 $19,400 to $78,950 12% $9,700 to $39,475 $78,950 to $168,400 $39,475 to $84,200 $168,400 to $321,450 24% $84,200 to $160,725 $321,450 to $408,200 $160,725 to $204,100 $408,200 to $612,350 $204,100 to $510,300 $612,350 and above 37% $510,300 and above ai, a 23 wants to be a per year in order a. How much does b. If the account yielded (do not use a calculator) C. With an interest rat d. If Janai di have