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(TCO A) Rose and John have liquid assets of $5,000 and other assets of $50,000. Their total liabilities equal $26,000. What is their net worth? (Show all work.)

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  1. (TCO A) Rose and John have liquid assets of $5,000 and other assets of $50,000. Their total liabilities equal $26,000. What is their net worth? (Show all work.)
  2. (TCO A) Construct a balance sheet from the following information. Be sure the format is correct. (Show all work.)
    Cash on hand                            $75
    Bank credit card balance         1,200
    Utility bill (over due)                   100
    Auto loan balance                   3,500
    Mortgage                              75,000
    Primary residence               105,000
    Jewelry                                  2,000
    Stocks                                 17,500
    Coin collection                        2,500
    2001 Toyota                           7,500
  3. (TCO A) The following questions are worth 5 points each. Please show all work.
    a. Inflation is expected to average 4% for the long term and Mr. Smith earned $50,000 this year. How much must he earn in 20 years just to keep up with inflation and maintain the balance between his income and his increasing expenditures?
  4. b. Jamie wants to have $2,000,000 for her retirement in 25 years. How much should she save annually if she thinks she can earn 10% on her investments?
  5. c. The Flemings will need $100,000 annually for 20 years during retirement. How much will they need at retirement if they can earn a 4% rate of return?
  6. d. The Hamptons want to have $3,500,000 for their retirement in 30 years. How much should they save annually if they think they can earn 8% on their investments?
  7. (TCO B) From the information given below, determine Steve's gross income for tax purposes.
    Salary                                                                   $32,000
    Interest (checking account)                                          $25
    Cash received as birthday gift                                   $1,000
    Dividends (mutual funds)                                          $5,500
    Child support payments received from ex-wife           $24,000
    Life insurance benefits received from aunt's death      $50,000
  8. (TCO B) Mary has the following expenses that she wants to include as itemized deductions for the year. Her adjusted gross income is $80,000. What is the total itemized deduction she can take? (Show all work.)
    Medical expenses              $4,500
  9. Home mortgage interest       8,000
  10. Credit card interest                 450
  11. Charitable contributions        1,500
  12. State property taxes             2,400
  13. Job-related expenses           1,900
  14. (TCO C) Maggie wants to open a checking account that will be the least expensive given her normal financial transactions. She typically writes 15 checks a month and uses an ATM 35 times a month. Her minimum checking balance falls to about $350 in an average month. Which of the following accounts would be least expensive for Maggie? (Show all your work.)
    Account A:
    No monthly fee is charged if a minimum balance of at least $300 is maintained.
    A $5.00 fee is charged in any month the minimum balance falls below $300.
    An ATM fee of $0.10 per transaction is charged on all transactions.
    Account B:
    No monthly fee is charged if a minimum balance of at least $500 is maintained.
    A $3.00 fee plus $0.10/check is charged in any month the minimum balance falls below $500. There is no ATM fee on transactions.
  15. (TCO C) Greg has negotiated a $20,000 price on a new pick-up truck. The manufacturer is offering a $1,500 rebate, or 3.9%, three-year financing. Greg is also able to get 7%, three-year financing at his credit union. If Greg plans to finance $18,000 over three years, should he take the rebate or the 3.9% financing? (Show all work.)
  16. TCO C) On September 8 Maggie lost her wallet. The following four credit cards were in it, and the following charges were made before she was able to report the cards missing. How much is she legally responsible for?
    Visa card                  $195
    MasterCard                 $25
    American Express     $500
    Discover                    $300
  17. (TCO C) Joe is purchasing a new truck for $30,000. Joe is making a $2,000 down payment, and he will make 60 monthly payments of $541 each. What are the total finance costs on this loan?

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