BUSN 380 Course Great Wisdom / tutorialrank.com BUSN 380 Course Great Wisdom / tutorialrank.com | Page 10

A family spends $28,000 a year for living expenses. If prices increase
by 4 percent a year for the next three years, what amount will the
family need for its living expenses?

What would be the yearly earnings for a person with $6,000 in
savings at an annual interest rate of 5.5 percent?
Elaine Romberg prepares her own income tax return each year. A tax
preparer would charge her $60 for this service. Over a period of 10
years, how much does Elaine gain from preparing her own tax return?
Assumes she can earn 3 percent on her savings.
7. Tran Lee plans to set aside $1,800 a year for the next six years,
earning 4 percent. What would be the future value of this savings
amount?

8. If you borrow $8,000 with a 5 percent interest rate to be repaid in
five equal payments at the end of the next five years, what would be
the amount of each payment? (Note: Use the present value of an
annuity table in the Chapter Appendix.)
9. Based on the following data, compute the total assets, total
liabilities, and net worth.

Liquid assets, $3,670

Household assets, $89,890

Investment assets, $8,340
$76,230

Long-term liabilities,

Current liabilities, $2,670