Assume that you are single and will be starting at a job somewhere here in Iowa paying $36,000 a year.
If you claim no federal dependents amount and one state allowance, then what will be your net monthly pay?
Single health insurance costs $100 a month and can be taken pre-tax out of your gross pay. You also decide to contribute $50 a month to a Flex Savings account (pre-tax). What will be your net monthly pay?
You also decide to contribute 10% of your gross salary to a retirement account using a pre-tax 401(k). What will be your net monthly pay? [back]
You have $40,000 in college loans that must be paid off within 10 years. The current rate is 5%. What is your monthly payment? [back]
You decide to purchase a car for $18,000 and plan to finance the entire amount with a 5-year loan at 7%. What is your monthly payment? [back]
You have an opportunity to purchase a house for $120,000. You have savings of $25,000 to put towards the house. You plan to take out a 30-year fixed-rate mortgage at 4% to pay for the house.
What is the monthly principal and interest payment?
If property taxes are $1,200 a year and homeowners insurance is $360 a year, what is the total monthly payment?
On the first payment, how much goes to principal?
How long does it take to pay off half of the mortgage amount?
If you would take the entire 30 years to pay the mortgage, how much interest would you pay?
After three years, you decide to pay an additional $30 a month. How many months have been knocked off the mortgage? [back]
If you're making $36,000 a year, then how much of your net monthly pay will be taken up with these three payments? [back]
The average price of a latte in 2019 in the US is $4.16, but we will round down to $4. Suppose that you wish to cut down your consumption and choose to cut out 5 per month. How much will that $20/month provide for you? What factors does one consider to determine this? time, rate, amount comparison
How do we actually make the calculations shown in the chart? Suppose we choose to save this money for 40 years but wonder about the effect of the interest rate return.
If the same money is invested in a bond fund that earns an average of 3% annual interest compounded monthly, then how much will you have? Repeat above with change.
If the same money is invested in a stock fund that earns an average of 7% annual interest compounded monthly, then how much will you have? Repeat above with change.
In each of the three examples above, how much did you contribute? (40 years * 12 months/year * $20/month)
Suppose that instead of (or better yet, in addition to) cutting out lattes, you cut out your cable bill. How much can you save? What do we need to know? time, rate, amount comparison
Using the same calculator as before, if you save $150 per month for 40 years into a stock fund that returns 6%, what is the final amount?
Change the question to be in a fund that returns 8%.
Which answer is more realistic or safer? Why?
Suppose that Mary graduates from college at age 22, she saves $4,800 per year ($400/month and compounded monthly) in an IRA (Roth) for the next five years and then stops adding any money, leaving it dormant for the next 35 years.
On the other hand, John also graduates at 22 but he waits until he is 32 to start his IRA. He then contributes $4,800 per year ($400/month and compounded monthly) into the same fund as Mary for the next 30 years.
Assuming 9% return (compounded monthly while depositing and also monthly thereafter), who has more at age 62? Use https://www.thecalculatorsite.com/finance/calculators/savings-calculators.php calculator and then choose "Savings Amount" in the Investment Calculators section, twice for Mary. [back]
Investing in stock fund earning 8% annually compounded monthly until age 65. Validate the following: