Personal Finance (5th Edition)
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Note: This is retail, but I didn't remove the DRM myself, so I cannot mark it as such.
Directed primarily toward undergraduate finance majors, this text also provides practical content to current and aspiring industry professionals, or anyone interested in learning how to manage their personal finances.
Personal Finance takes a hands-on approach to building a financial plan. The text’s seven parts each cover one section of a financial plan; Chapter 21 is the capstone. A running example throughout the book and a variety of end-of-chapter cases reinforce the practical aspects of planning.
the interest rates they pay on deposits or charge on loans. risk premium An additional return beyond the risk-free rate that can be earned from a deposit guaranteed by the government. A risk-free rate is a return on an investment that is guaranteed for a specified period. As an example, at a commercial bank you can invest in a CD with a maturity that matches your desired investment horizon. When you invest in a CD that has a maturity of one year, you are guaranteed the interest rate offered on
pays 4% interest. Interest Earned = Deposit Amount * Interest Rate = $1,000 * .04 = $40 568 Although the interest income is attractive, she cannot write checks on a savings account. As she expects to need the funds in her checking account to pay bills in the near future, Chapter 20 Estate Planning she decides not to switch those funds to a savings account at this time. will,aestablish plan for graduate trusts or gifts if your estate is subject highworkforce, taxes, and decide A running example
norevised desire to one because rate to is so low.in 20 institutions. years instead of the original 30. His goal is to save $500,000 by that time. He is not takBrad is also concerned about his liquidity. His credit card (with a $35 annual fee and ing advantage of his employer’s retirement match; his employer will match retirement 18% interest rate) is nearing its credit limit of $10,000. He is reluctant to sell his stocks plan contributions up to $300 per month. Factoring in the employer match,
claimed as a dependent on his or her parents’ tax return. Self-supporting students can use the tax credits to reduce their own taxes. Like many other tax benefits, the American Opportunity Tax Credit is set to expire after 2012 unless renewed. The Lifetime Learning tax credit allows students or their parents to claim 20% of the first $10,000 of college expenses per year as a tax credit. Both the American Opportunity Tax Credit and the Lifetime Learning tax credit are phased out for higher income
saving now instead of 5 years from now? (Again, assume an 8% annual return.) Future Value of an Annuity Payment per Period Number of Periods Interest Rate per Period $4,000 25 8% Future Value 3. Develop three or four suggestions that could help Brad reduce his income tax exposure. Suggestions to Reduce Taxes Pros Cons 4. Would any of your recommendations in questions 1 through 3 change if Brad were 45? If he were 60? Why or why not? Copyright © Pearson Education, Inc. All rights