Ruby is 25 and has a good job at a biotechnology company. She currently has $9.400 in an IRA, an important part of her retirement nest egg. She believes her IRA will grow at an annual rate of 8 percent, and she plans to leave it untouched until she retires at age 65 . Ruby estimates that she will need $875,000 in her tota/ retirement nest egg by the time she is 65 in order to have retirement income of $20,000 a year (she expects that Social Security will pay her an additional $15,000 a year). Using Exhibit 1-A, Exhibit 1-B, Exhibit 1-C, Exhibit 1-D, answer the following. questions. a. How much will Ruby's IRA be worth when she needs to start withdrawing money from it when she retires? (Round discount factor to 3 decimal places and final answer to the nearest whole dollar.) b. How much money will she have to accumulate in her company's 401(k) plan over the next 40 years in order to reach her retirement income goal? (Round discount factor to 3 decimal places and final answer to the nearest whole dollar.) Use the following data: Calculate the costs of buying versus leasing a motor vehicle. Assume you are in the 35 percent tax bracket and purchase a municipal bond with a yield of 6.75 percent. Use the formula presented in this chapter to calculate the taxable equivalent yield for this investment. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Daniel Simmons arrived at the following tax information: What amount would Daniel report as taxable income? Becky Fenton has 25/50/25 automobile insurance coverage. If two other people are awarded $40,000 each for injuries in an auto accident in which Becky was judged at fault, how much of this judgment would the insurance cover? Using time value of money tables (Exhibit 1-A, Exhibit 1-B. Exhibit 1-C. Exhibit 1-D), calculate the following. a. The future value of $590 six years from now at 8 percent. (Round your factor to 3 decimal places and final answer to 2 decimal places.) Future value b. The future value of $775 saved each year for 10 years at 8 percent. (Round your factor to 3 decimal places and final answer to 2 decimal places.) c. The amount a person would have to deposit today (present value) at a 7 percent interest rate to have $3,600 five years from now. (Round your factor to 3 decimal places and final answer to 2 decimal places.) MNOP, Incorporated, declared a $1.00 dividend with a record date of Thursday. September 15 , and a payment date of Thursday, October 20. Cheri does not want to receive this current dividend. What is the earliest date that she should purchase the stock in order to avoid receiving the dividend? Multiple Choice October 20 September 15 October 18 September 16 Cheyenne has a home insured for $120,000. It would cost $140,000 to rebulid her home. If she has home insurance that provides personal property coverage at 70 percent of the home's value, how much of her household belongings would be covered? Multiple Choice $98.000 $120,000 $48,000 Estimate the affordable monthly mortgage payment, the affordable mortgage amount, and the affordable home purchase price for the following situation. Use Exhibit 7-6. Exhibit 7-7. (Round your intermediate and final answers to the nearest whole dollar.)
