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3 . ( TCO 3 ) Carla Brown wants to know what price home she can afford . Her annual gross income is $ 45,000 . She owes $ 1,050 per month on other debts and expects her property taxes and homeowners insurance to cost $ 250 per month . She knows she can get a 5.0 %, 30- year mortgage , so her mortgage payment factor is 5.37 . She expects to make a 20 % down payment . What is Michelle ' s affordable home purchase price ? Assume a lender will use a 38 % monthly gross income guideline . Round your answer to the nearest $ 100 . ( Points : 10 )
4 . ( TCO 3 ) Identify two or three sources of consumer credit and discuss the advantages and
disadvantages of each type selected . ( Points : 10 )
5 . ( TCO 5 ) Select two or three investment alternatives and describe how the influential factors of safety , risk , income , growth , and liquidity affect each investment alternative . ( Points : 10 )
6 . ( TCO 7 ) What is a will ? Identify the primary types of wills . What are the ramifications of not having a will ? ( Points : 10 )
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TCO 1 Time value of money relationships & applications ; opportunity costs ; personal financial statements -Problem Set 1
1 . Ben Collins plans to buy a house for $ 65,000 . If that real estate property is expected to increase in value 5 percent each year , what would its approximate value be seven years from now ?