This project is a comprehensive practice case. It is designed to help you apply knowledge and skills you have learned from BUS 370 to real world situation. In one or two years, you will graduate from college and have your first job. Starting with the day when you accept the job offer (or even before the time when you take the offer if you receive multiple job offers), you are exposed to an environment in which you have to make decisions in many aspects, especially in finance aspect. Your decision in personal finance area will determine your personal wealth directly and eventually the quality of your personal life in the whole life span. By taking BUS370 course, you are armed with skills necessary for personal finance decisions. This project is an exercise that will assist you to build a framework in personal finance area. You are expected to collect information needed from various sources, make quantitative analyses, and make decisions based on scenarios the project provides and data you collect. Please write a 2-4 page project report that answers the following questions. 1. Suppose you get a job offer from an investment bank, and your compensation package is the following: your annual income (including salary and bonus) will be $70,000, among which $49,000 is the basic salary and $21,000 is the end of year bonus. Your employer will match your deposit in your 401k plan but the amount of match money will be capped by 6% of your salary. If you decide to input 8% of your salary in your 401k account each month and expect to make 10% return, at time when you retire, how much money will you have in your 401k account? If you need $1.5 million dollars for your retirement life, based on the above investment in your 401k plan, at what age can you retire to enjoy life? 2. After arranging your retirement money, you are planning to save money for down payment of house purchase. Suppose your investment in 401k is tax-deductible. That means the amount you invest in 401k will be subtracted from your taxable income. Assuming your personal income tax rate is 22% roughly, how much money do you think you can save each month based on your estimation for your monthly expenses? 3. If you choose to save $500 each month from your salary and invest them in stock market for three years, how much will you have at end of year three? Assume your expected return is 8%. In addition to save $500 per month, each year you will invest bonus you receive at end of year in stock market with 8% expected return, how much money will you have totally (from investments of both monthly saving and bonus) at end of year three? 4. Based on your answer to question 3, if at year three, you want to buy a house that is sold at $300,000 and it requires 20% down payment and $5,000 closing costs, can you afford it? Please use the current 30 years fixed mortgage rate to make calculation. You can find the mortgage rates from Yahoo finance or bankrate.com. Currently, mortgage rate is not low. If, alternatively, you want to borrow a 15 years fixed rate mortgage, can you pass the mortgage bank's evaluation? Usually the banks don't allow your monthly mortgage payment to exceed 30% of your pretax salary. All others equal, to be qualified for a 15 years fixed rate mortgage borrowing, how much annual salary do you have to make? Requirements for project report Your project report should include the following contents: 1. The data, e.g. the mortgage rate your collect; 2. The assumptions you make; 3. Your quantitative analysis to each question; and 4. Your answer to each question This project is a comprehensive practice case. It is designed to help you apply knowledge and skills you have learned from BUS 370 to real world situation. In one or two years, you will graduate from college and have your first job. Starting with the day when you accept the job offer (or even before the time when you take the offer if you receive multiple job offers), you are exposed to an environment in which you have to make decisions in many aspects, especially in finance aspect. Your decision in personal finance area will determine your personal wealth directly and eventually the quality of your personal life in the whole life span. By taking BUS370 course, you are armed with skills necessary for personal finance decisions. This project is an exercise that will assist you to build a framework in personal finance area. You are expected to collect information needed from various sources, make quantitative analyses, and make decisions based on scenarios the project provides and data you collect. Please write a 2-4 page project report that answers the following questions. 1. Suppose you get a job offer from an investment bank, and your compensation package is the following: your annual income (including salary and bonus) will be $70,000, among which $49,000 is the basic salary and $21,000 is the end of year bonus. Your employer will match your deposit in your 401k plan but the amount of match money will be capped by 6% of your salary. If you decide to input 8% of your salary in your 401k account each month and expect to make 10% return, at time when you retire, how much money will you have in your 401k account? If you need $1.5 million dollars for your retirement life, based on the above investment in your 401k plan, at what age can you retire to enjoy life? 2. After arranging your retirement money, you are planning to save money for down payment of house purchase. Suppose your investment in 401k is tax-deductible. That means the amount you invest in 401k will be subtracted from your taxable income. Assuming your personal income tax rate is 22% roughly, how much money do you think you can save each month based on your estimation for your monthly expenses? 3. If you choose to save $500 each month from your salary and invest them in stock market for three years, how much will you have at end of year three? Assume your expected return is 8%. In addition to save $500 per month, each year you will invest bonus you receive at end of year in stock market with 8% expected return, how much money will you have totally (from investments of both monthly saving and bonus) at end of year three? 4. Based on your answer to question 3, if at year three, you want to buy a house that is sold at $300,000 and it requires 20% down payment and $5,000 closing costs, can you afford it? Please use the current 30 years fixed mortgage rate to make calculation. You can find the mortgage rates from Yahoo finance or bankrate.com. Currently, mortgage rate is not low. If, alternatively, you want to borrow a 15 years fixed rate mortgage, can you pass the mortgage bank's evaluation? Usually the banks don't allow your monthly mortgage payment to exceed 30% of your pretax salary. All others equal, to be qualified for a 15 years fixed rate mortgage borrowing, how much annual salary do you have to make? Requirements for project report Your project report should include the following contents: 1. The data, e.g. the mortgage rate your collect; 2. The assumptions you make; 3. Your quantitative analysis to each question; and 4. Your answer to each