BUSN 380 help Making Decisions/uophelp.com BUSN 380 help Making Decisions/uophelp.com | Page 8

3. In the mid-1990s, selected automobiles had an average cost of
$12,000. The average cost of those same motor vehicles is now $20,000.
What was the rate of increase for this item between the two time periods?
4. 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?
5. What would be the yearly earnings for a person with $6,000 in
savings at an annual interest rate of 5.5 percent?
6. 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 Long-term liabilities, $76,230
Current liabilities, $2,670