this is dummy assignment
Sheet1 Price (X)Quantity demanded (Y) 56637 23967 43908 56797 76728 76891 92884 91615 32876 85824 74678 32925 50878 96612 55905 85710 32891 86734 96894 69922 11908 82644 65798 94940 94741 54828 82560 91660 59766 89730 63903 59506 90618 50847 86816 85805 12659 12777 77777 73899 65553 85553 75767 76720 74849 71551 90627 63967 65528 89829 86553 74774 96655 54602 84756 91720 60725 87532 63932 65591 1. Buy on time or pay cash? You are going to make a substantial purchase. You have enough money to pay cash, but don’t know if that’s the way to make best use of your assets. Maybe you should take out an installment loan to make the purchase and invest the cash you would otherwise have used to pay for it. Use the information provided to complete the following worksheet and analyze how the numbers work out most favorably for you. For simplicity, compounding is ignored in calculating both the cost of interest and interest earnings. [Note: Enter your dollar answers rounded to the nearest two cents and precede numbers that are less than zero (0) with a minus sign (–).] Buy On Time or Pay Cash Cost of Borrowing 1. Terms of the loan a. Amount of the loan $13,000 b. Length of the loan (in years) 3 c. Monthly payment $401.44 2. Total loan payments made ($ per month months) $ 3. Less: Principal amount of the loan $ 4. Total interest paid over life of loan $ 5. Tax considerations: – Is this a home equity loan? no – Do you itemize deductions on your federal tax return? yes 6. What federal tax bracket are you in? 10% 7. Taxes saved due to interest deductions ($ x %) $ 8. Total after-tax interest cost on the loan $ Cost of Paying Cash 9. Annual interest earned on savings (3% x ) $ 10. Annual after-tax interest earnings ($ x %) $ 11. Total after-tax interest earnings over life of loan ($ x years) $ Net Cost of Borrowing 12. Difference in cost of borrowing versus cost of paying cash $ Based on the numbers alone, you should because: The interest on a loan will cost you more than the interest you would earn if you invested the principal. If you invest the principal, you’ll earn more interest than you’ll pay on the loan. 2. How much life insurance do you need? Calculating resources- Part 2 Sam and Teresa Cho have completed Step 1 of their needs analysis worksheet and determined that they need $3,522,000 to maintain the projected lifestyle of Teresa (age 38) and their two children (ages 8 and 10) in the event of Sam’s (the primary earner’s) death. The Chos also have certain financial resources available after Sam’s death, however, so their life insurance needs are lower than this amount. If Sam dies, Teresa will be eligible to receive Social Security survivors’ benefits—approximately $3,800 a month ($45,600 a year) until the youngest child graduates from high school in 10 years. After the children leave home, Teresa will be able to work full-time and earn an estimated $38,000 a year (after taxes) until she retires at age 65. After Teresa turns 65, she’ll receive approximately $3,200 a month ($38,400 a year) from her own Social Security and retirement benefits. The life expectancy for a woman within Teresa’s demographic is 87. The couple has also saved $60,000 in a mutual fund, and Sam’s employer provides him a $100,000 life insurance policy. Using this information, complete Step 2 of the needs analysis worksheet to estimate their total financial resources available after death. (Note: If the value of a certain entry is zero, be sure to enter “0” to receive credit.) Life Insurance Needs Analysis Worksheet (Part 2) Step 2: Financial Resources Available After Death 1. Income Period 1 Period 2 Period 3 a. Annual Social Security survivors’ benefits $45,600 $0 $0 b. Surviving spouse’s annual income $0 $0 c. Other annual pensions and Social Security benefits $0 $0 $38,400 d. Annual income (1a + 1b + 1c) $45,600 e. Number of years in time period 10 17 22 f. Total period income (1d x 1e) $456,000 g. Total income $1,946,800 2. Savings and investments 3. Other life insurance 4. Other resources $0 Total financial resources available (1g + 2 + 3 + 4): $2,106,800 Finally, to determine the value of life insurance Sam and Teresa should purchase, complete Step 3 of the needs analysis method by subtracting the total financial resources available from the total financial resources needed. Step 3: Additional Life Insurance Needed Total financial resources needed (from Step 1) $3,522,000 Total financial resources available (from Step 2) $2,106,800 Additional life insurance needed: True or False: Alternatively, the Chos could have estimated their life insurance needs using the multiple-of-earnings method, a more complicated but more accurate method than the needs analysis. False True 3. Financial Planning Exercise 8 Calculating payments, interest, and APR on auto loan After careful comparison shopping, Isabella Green decides to buy a new Toyota Camry. With some options added, the car has a price of $22,500 - including plates and taxes. Because she can't afford to pay cash for the car, she will use some savings and her old car as a trade-in to put down $7,500. She plans to finance the rest with a $15,000, 60-month loan at a simple interest rate of 8.5 percent. What will her monthly payments be? Round the answer to the nearest cent. $____ per month How much total interest will Isabella pay in the first year of the loan? Round the answer to the nearest cent. $________ How much interest will Isabella pay over the full (60-month) life of the loan? Round the answer to the nearest cent. $_______ What is the APR on this loan? Round the answer to 1 decimal place. _______% Because of a job change, Finn McBryde has just relocated to the southeastern United States. He sold his furniture before he moved, so he's now shopping for new furnishings. At a local furniture store, he's found an assortment of couches, chairs, tables, and beds that he thinks would look great in his new, two-bedroom apartment; the total cost for everything is $5,000. Because of moving costs, Finn is a bit short of cash right now, so he's decided to take out an installment loan for $5,000 to pay for the furniture. The furniture store offers to lend him the money for 48 months at an add-on interest rate of 9 percent. The credit union at Finn's firm offers to lend him the money - they'll give him the loan at a simple interest rate of 11.5 percent, but only for a term of 18 months. Compute the monthly payments for the loan from the credit union.Round the answer to the nearest cent. $_____ per month Determine the APR for the loan from the credit union.Round the answer to 2 decimal places. ______% Compute the monthly payments for the loan from the furniture store.Round the answer to the nearest cent. $____ per month Determine the APR for the loan from the furniture store.Round the answer to 2 decimal places. ____ % Which is more important: low payments or a low APR? 4. Find the finance charges on a 7.1 percent, 18-month, single-payment loan when interest is computed using the simple interest method. Assume that the loan amount requested is $1,000. Round your answer to the nearest cent. $ Determine the APR in this case. Round your answer to two decimal places. ____% Find the finance charges on the same loan when interest is computed using the discount method. Round your answer to the nearest cent. $ Determine the APR in this case. Round your answer to two decimal places. ____% Using the simple interest method, find the monthly payments on a $3,500 installment loan if the funds are borrowed for 36 months at an annual interest rate of 9%. Use financial calculator to answer the question.Round the answer to the nearest cent. $______ per month Assume that interest is the only finance charge. Use financial calculator to answer the questions. How much interest would be paid on a $7,000 installment loan to be repaid in 48 monthly installments of $184.38?Round the answer to 4 decimal places. _____ % per month What is the APR on this loan?Round the answer to 2 decimal places. ______ % 5. Every 6 months, Leo Perez takes an inventory of the consumer debts he has outstanding. His latest tally shows that he still owes $2,500 on a home improvement loan (monthly payments of $250); he is making $75 monthly payments on a personal loan with a remaining balance of $875; he has a $1,500, secured single-payment loan that's due late next year; he has a $85,000 home mortgage on which he's making $1,100 monthly payments; he still owes $12,600 on a new car loan (monthly payments of $675); and he has a $1,230 balance on his Mastercard (minimum payment of $50), a $45 balance on his Shell credit card (balance due in 30 days), and a $700 balance on a personal line of credit ($80 monthly payments). a. Use Worksheet 7.1 to prepare an inventory of Leo's consumer debt. Type of Consumer Debt Creditor Currently Monthly Payment Latest Balance Due Auto loans $ $ Personal installment loans $ $ Home improvement loan $ $ Single-payment loans $ Credit cards Mastercard $ $ (retail charge cards, bank cards, T&E cards, etc.) Shell $ Personal line of credit $ $ Totals $ $ b. Find his debt safety ratio, given that his take-home pay is $3,500 per month.Round the answer to 1 decimal place. % c. Would you consider this ratio to be good or bad? OpenIntro Here is OpenIntro’s RLab for Chapter 8: http://htmlpreview.github.io/?https://github.com/andrewpbray/oiLabs-base-R/blob/master/simple_regression/simple_regression.html Record and turn in your answers for the On Your Own section. · In questions that ask for a number, give the numerical answer along with what that number describes. Be specific. · In questions that ask for your code input, give the code and also describe what R returns. · In questions that ask for explanation or analysis, provide a reasonably detailed response with evidence supporting your claims. Supplemental Questions The idea of these supplemental questions is for