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Points will be graded accordingly: Part I Income Worksheet 10 Income / Expense Worksheet 10 Net worth Statement 5 Part II Goals Worksheet 7.5 Ratio Calculations 7.5 Final Analysis 10 Total Points: 50...

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Points will be graded accordingly:
    Part I
Income Worksheet
    
10
    Income / Expense Worksheet
    10
    Net worth Statement
     5
    Part II
Goals Worksheet
    
7.5
    Ratio Calculations
    7.5
    
Final Analysis
    
10
    Total Points:
     50
Income Worksheet - Tax Calculation to get AGI
    Filing status - Ma
ied
    
    Income #1 – Alexander’s Income
    $ 98,000
    Income #2 – Theresa’s Income
    $ 49,000
    Total Gross Income
    $ 147,000
    Deductions
    
     Health Benefits (400 * 12)
    $ 4,800
     401k #1 (150* 12)
    $ 1,800
     401k #2 (100 * 12)
    $ 1,200
     Property Tax
    $ 5,160
     Student Loan #1 (250 * 12)
    $ 3,000
     Student Loan #2 (250 * 12)
    $ 3,000
    
    
    Adjusted Gross Income (AGI)
    $ 128,040
    Standard Deduction
    $ 24,800
    *AGI (Federal Taxable income)
    $ 103,240
    
    
    Taxable income (begin Federal Tax Calculation below)
    $ 103,240
    Federal Tax (use steps shown in class to calculate the tax in each tax
acket)
    $ 14,293
    State Tax (taken out of W-2 income per paycheck, calculate based on total gross income)
    $ 7,350
    FICA Tax (taken out of W-2 income per paycheck, calculate based on total gross income)
    $ 11,245
    Total Tax Owed/Paid
    $ 32,888
    Child Tax Credit
    $ 4,000
    Total Tax Paid (after credit)
    $ 28,888
    Taxable Income – Total Tax paid =
    $ 74,352
    + Standard Deduction
    +$ 24,800
    **Total Income to ca
y over to Budget
    $ 99,152
Please show your work HERE on how you calculate the Federal Tax using the
acket method shown in class. Show FICA and STATE calculations as well. ROUND each calculation to the nearest WHOLE DOLLAR.
Taxable Income: 103,300
Ma
ied: Federal
0 – 19,750 (10%) = 1,975
19,751 – 80,250 (12%) = 7,260
80,251 – 103,240 (22%) = 5,058
Total:    14,293
State:
Alexander and Theresa
98,000 * .05    49,000 * .05
4,800        +    2,400
Total:     7,350
FICA:
Alexander and Theresa
98,000        49,000
* 0.0765    * 0.0765
7,344     +    3,672
Total: 11,245
*AGI - Adjusted Gross Income after reducing income by tax deductions and standard deduction.
**Income to ca
y over to the budget includes the amount of the standard deduction, as this money was not spent or lost, merely reduced for a tax calculation
Income / Expense Statement (Budget) MUST HAVE BOTH COLUMNS – ALL THE WAY DOWN
XXXXXXXXXXMonthly XXXXXXXXXXAnnually    
Income ca
ied over from budget XXXXXXXXXX,262                    99,152
Fixed Expenses                         
Mortgage payment                 1,850                 22,200    
Homeowners’ Association             320                     3,840
Property Tax                     0    see income statement – deduction from income
Gas, electricity, water              185                     2,220
Streaming/Internet & cell phone         175                     2,100
Car Payment                      350                     4,200
Life insurance                  XXXXXXXXXX                     XXXXXXXXXX
Car insurance                     XXXXXXXXXX                     1,100
Homeowner’s insurance             175                     2,100
Total Fixed Expenses $ XXXXXXXXXX3,187 XXXXXXXXXX38,244
Variable Expenses
Food (groceries)     650                  7,800
Food (eating out)                  275                     3,300
Childcare                     250                     3,000
Additional babysitting              150                     1,800
Entertainment                 175                  2,100
Disney Passes                 XXXXXXXXXX                     1,680
Car maintenance/gas          XXXXXXXXXX                      3,300
Baby supplies/ diapers             200                     2,400
Doctor Office Visits & RX          XXXXXXXXXX                  XXXXXXXXXX
Haircuts                     100                     1,200
Clothing and misc.                  400                     4,800
Repairs                     XXXXXXXXXX                  XXXXXXXXXX
Debt/credit card payments             200 (*6 mos)             1,200
Total Variable Expenses    $         2,949                    34,180
Savings for goals
Emergency Fund Savings             50                     XXXXXXXXXX
Bikes for the twins                  50     (*3)                 XXXXXXXXXX
Summer vacation                  200    (*11)                 2,200
Concert Tix                      100                     1,200
Disney Cruise                  266                     3,192
New TV                     50                     XXXXXXXXXX
Truck Tires                     75                     XXXXXXXXXX
Down Payment Home              646                     7,752
College Savings                 100                     1,200
Retirement                     250                     3,000
Total Savings for Goals    $        1,786                     20,794
**Do not subtract goal savings as variable expenses because the money wasn’t spent yet
INCOME - (FIXED + **VARIABLE EXPENSES) = $ 2,126        $25,512
(COMPARE FINAL CALCULATION TO SAVINGS GOALS TOTALS: Do they match, loftier goals than actual money, more money available than goal savings? How can you work this into your final analysis for advice for the Stephens? How can they reach their goals and stay within their income?)
Net Worth Statement
Net Worth = Total Assets - Liabilities
Monetary Assets
Investment assets:
            401K - $42,000, College savings mutual fund $2,650, stock fund $250
    
Liquid assets:
        Savings account - $3,750
Total monetary assets: $48,650
Physical Assets
Home 585,000    Furnishings 9,000    
Toyota 8,000    Honda 20,000
Personal Belongings 16,000
Total physical assets: $ 638,000
TOTAL ASSETS    $ 686,650
Liabilities
Home 363,000
Honda 4,200
Student Loans 32,000
Pottery Barn Credit Card 1200
TOTAL LIABILITIES    $ 400,400
XXXXXXXXXXTOTAL NET WORTH    $286,250     (686,650 – 400,400)

Goals – TVM Problems basically
Work must be shown as the examples demonstrate
You need to vary your savings vehicle used and research appropriate interest rates expected from chosen investment vehicle.
SHORT TERM GOALS
    Goal
    Amount Needed
    Month/Year needed
    Date Saving Starts
    # of Months to save
    Interest Rate Earned
    Savings Vehicle Used
    Monthly Amount to Save
    Bikes
    $150
    
    
    
    
    
    
    Vacation
    $2200
    June 2022
    July 2021
    11
    1.25%
    Savings Account
    $?
    Concert Tix
    $1200
    
    
    
    
    
    
Ex. Vacation: Complete calculation and replace “?” with actual money value in Goal Chart.
TVM Calculato
PV = 0
Payment = ?
FV = 2200
Interest Rate = 1.25
Periods = 11
Compound monthly
INTERMEDIATE GOALS
    Goal
    Amount Needed
    Month/Year needed
    Date Saving Starts
    # of Months to save
    Interest Rate Earned
    Savings Vehicle Used
    Monthly Amount to Save
    Cruise
    $6,500
    June
2023
    July
2021
    24
    1.8 %
    CD
    $?
    TV
    $600
    
    
    
    
    
    
    Tires
    $900
    
    
    
    
    
    
Ex. Cruise: Complete calculation and replace “?” with actual money value in Goal Chart.
PV = 0
Payment = ?
FV = 6,500
Rate 1.8
Period = 24 months
Compounding monthly
LONG TERM GOALS
    Goal
    Amount Needed
    Month/Year needed
    Date Saving Starts
    # of Months to save
    Interest Rate Earned
    Savings Vehicle Used
    Monthly Amount to Save
    Home-down
    $40,000
    
    
    
    
    
    
    College
    $110,000
    August 2035
    September 2019
    192
(16 yrs x 12 mos)
    10%
    Mutual Funds
    
    Retirement
    
    Age 32
    Age 65
    
    
    Mutual Funds & Stocks
    
Ex. College: Complete calculation and replace “?” with actual money value in Goal Chart.
PV = 2650
Payment = ?        (Is $100 enough?)
FV = 110,000
Rate = 10
Period = 192
Compounding monthly
You can create your own goal spreadsheet.
Please do not add in any additional or modify the goals provided.
From the many ways we’ve learned to invest, goals should reflect how to save/earn the most over time to reach the goals successfully. DO NOT COPY FROM THE EXAMPLES FOR INVESTMENT VEHICLES, there are varying ways to invest for the best possible outcome of growing money.
Financial Ratios
Measures of Cu
ent Financial Status: This is semi-guided to assist you. You should have 5 values for this section.
1. Consumption-to-Income Ratio: amount of spending from one's budget divided by disposable income
(Recommended: approx. 70-90% if using 10/20/70 Budget)
· Fixed spending + Variable spending = Total spending
· Total spending divide by the total disposable income (ca
y over, first line on the budget)
2. Basic Liquidity Ratio: amount of time, in months, a family can meet its expenses with its monetary assets (liquid assets in savings and checking – Assume their monthly income is direct deposited into their checking account.)
To find, add up all liquid assets and divide by monthly expenses. This is NOT a percentage.
(Recommended: 3 to 6 months)
· Savings divide by total monthly expenses:
Measures of Debt Burden:
3. Consumer Debt- Service Ratio: credit card and auto/car debt repayments by your disposable income, expressed in a Monthly figure
(Recommended: < 11%)
· 2 amounts to use here . . .
4. Annual Debt-Service Ratio: same as above plus one's mortgage payment, expressed Yearly.
(Recommended: < 40% for Homeowners; < 15% if Renting)
Measures of Progress toward Goals: USE THE VALUES YOU FOUND ON THE GOALS CHART USING TVM AND INVESTMENT SAVINGS VEHICLE - NOT THE VALUES FROM THE NARRATIVE, SO ANSWERS HERE WILL VARY BY GROUP.
5. Long-Term Savings-to-Income Ratio: take the amount one is saving for long-term goals such as college and retirement and divide by disposable income (monthly or
Answered 6 days After Dec 02, 2021

Solution

Nitish Lath answered on Dec 08 2021
110 Votes
Goals – TVM Problems basically
Work must be shown as the examples demonstrate
You need to vary your savings vehicle used and research appropriate interest rates expected from chosen investment vehicle.
SHORT TERM GOALS
    Goal
    Amount Needed
    Month/Year needed
    Date Saving Starts
    # of Months to save
    Interest Rate Earned
    Savings Vehicle Used
    Monthly Amount to Save
    Bikes
    $150
    Oct 2021
    July 2021
    3
    1.25%
    Saving account
    $49.95
    Vacation
    $2200
    June 2022
    July 2021
    11
    1.25%
    Savings Account
    $198.96
    Concert Tix
    $1200
    July 2022
    July 2021
    12
    1.25%
    Savings
    $99.43
For vacations
PV = 0
FV = 2200
Interest Rate = 1.25
Periods = 11
Compound monthly
PMT for Vacations= (Interest rates, period, present value, future value)
PMT for Vacations = (1.25%/12, 11, 0, 2200) = $198.86
PMT for Bikes= (Interest rates, period, present value, future value)
PMT for Bikes = (1.25%/12, 3, 0, 150) = $49.95
PMT for Concert tix= (Interest rates, period, present value, future value)
PMT for Concert tix = (1.25%/12, 12, 0, 1200) = $99.43
INTERMEDIATE GOALS
    Goal
    Amount Needed
    Month/Year needed
    Date Saving Starts
    # of Months to save
    Interest Rate Earned
    Savings Vehicle Used
    Monthly Amount to Save
    Cruise
    $6,500
    June
2023
    July
2021
    24
    1.8 %
    CD
    $266.19
    TV
    $600
    Sep 2023
    July 2021
    26
    1.8%
    CD
    $22.65
    Tires
    $900
    August 2023
    August 2021
    24
    1.8%
    CD
    $36.86
Ex. Cruise: Complete calculation and replace “?” with actual money value in Goal Chart.
PV = 0
Payment = ?
FV = 6,500
Rate 1.8
Period = 24 months
Compounding monthly
PMT for Cruise= (Interest rates, period, present value, future value)
PMT for Cruise = (1.80%/12, 24, 0, 6500) = $266.19
PMT for Tire= (Interest rates, period, present value, future value)
PMT for Tire = (1.80%/12, 26, 0, 600) = $22.65
PMT for TV= (Interest rates, period, present value, future value)
PMT for TV = (1.80%/12, 24, 0, 900) = $36.86
LONG TERM GOALS
    Goal
    Amount Needed
    Month/Year needed
    Date Saving Starts
    # of Months to save
    Interest Rate Earned
    Savings Vehicle Used
    Monthly Amount to Save
    Home-down
    $40,000
    Aug 2030
    August 2019
    132
11 yrs* 12 mos)
    10%
    Mutual funds
    $167.46
    College
    $110,000
    August 2035
    September 2019
    192
(16 yrs x 12 mos)
    10%
    Mutual Funds
    
$233.83
    Retirement
    $500000
    Age 32
    Age 65
    396
(33 yrs...
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