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1
2. How much money will Laura and Marty have to deposit each month (beginning one
month after she is born and ending when she turns 18) in order to have enough
saved up for their child’s education. Assume that the yield on investments is 8%
per year, college expenses increase at the rate of 4% per year, and that their child
will enter college when he or she turns 18 and will complete the degree in 4 years.
Annual Yield 8%
Number of years until child attends college 18
Annual College Expenses (currently) $20,000
Inflation rate 4%
Years in college 4
College expense (Freshman Year) $ 40,516.33
PV = -20,000, I/Y= 4%, N = 18, PMT = 0, CPT FV1 =
College expense (Sophomore Year) $ 42,136.98
PV = -20,000, I/Y= 4%, N = 19, PMT = 0, CPT FV2 =
College expense (Junior Year) $ 43,822.46
PV = -20,000, I/Y= 4%, N = 20, PMT = 0, CPT FV3 =
College expense (Senior Year) $ 45,575.36
PV = -20,000, I/Y= 4%, N = 21, PMT = 0, CPT FV4 =
$172,051.13
Total Savings Accumulation Required for College Expenses once child
turns 18 $153,281.95
PV of FV1 (n = 0) to PV of FV4 (n = 3) at I/Y = 8%
Monthly deposits required to save up for 4 year's of child's college
education at age 18 ($319.28)
FV = 153,281.95, I/Y= 8/12, N = 216, PV = 0, CPT PMT =
3. How much money will the Hall’s have to set aside each month so as to have enough
saved up for a down payment on the $140,000 house within 12 months? Assume
that the closing costs amount to 2% of the loan balance and than the down payment
is 10% of the price. Note: Annual rate of return on investment is 12%.
2
Purchase Price of House (assumed to be the same after 12 months)……………………………......140,000
10% Down Payment …………..…………………………………………………………………......14,000
Loan Amount ………………………………………………………………………..……………...126,000
Closing Costs ………………………………………………………………………………………….2,520
Total Money needed to be saved for Down Payment and Closing Costs………………………….…16,520
Annual Rate of return on investments………………………………………………………………..…..8%
Number of months until purchase of house………………………………………………………..……..12
Monthly deposits required to accumulate total closing costs……………………………..……..($1,326.92)
Marty's Gross Annual Salary…………………………………………………………………...…….50,000
Laura's Gross Annual Salary……………………………………………………………………..…..25,000
Income tax rate……………………………………………………………………………………..…..28%
Monthly take home pay (Marty)……………………………………………………………………….3,000
Monthly take home pay (Laura)………………………………………………………………………..1500
4 If the interest rate on a 30-year mortgage is at 5% per year when the Hall’s purchase
their house, how much will their mortgage (monthly) payment be? Ignore
insurance and taxes, as well as inflation.
3
Beginning Reduction of
Month Principle Balance Payment Interest Principle Outstanding Balance
1 126,000 ($676.40) $ 525.00 ($151.40) $125,848.60
2 $125,848.60 ($676.40) $ 524.37 ($152.03) $125,696.58
3 $125,696.58 ($676.40) $ 523.74 ($152.66) $125,543.92
4 $125,543.92 ($676.40) $ 523.10 ($153.30) $125,390.62
5 $125,390.62 ($676.40) $ 522.46 ($153.93) $125,236.69
6 $125,236.69 ($676.40) $ 521.82 ($154.58) $125,082.11
7 $125,082.11 ($676.40) $ 521.18 ($155.22) $124,926.89
8 $124,926.89 ($676.40) $ 520.53 ($155.87) $124,771.03
9 $124,771.03 ($676.40) $ 519.88 ($156.52) $124,614.51
10 $124,614.51 ($676.40) $ 519.23 ($157.17) $124,457.34
11 $124,457.34 ($676.40) $ 518.57 ($157.82) $124,299.52
12 $124,299.52 ($676.40) $ 517.91 ($158.48) $124,141.04
13 $124,141.04 ($676.40) $ 517.25 ($159.14) $123,981.90
14 $123,981.90 ($676.40) $ 516.59 ($159.80) $123,822.09
15 $123,822.09 ($676.40) $ 515.93 ($160.47) $123,661.62
16 $123,661.62 ($676.40) $ 515.26 ($161.14) $123,500.49
17 $123,500.49 ($676.40) $ 514.59 ($161.81) $123,338.68
18 $123,338.68 ($676.40) $ 513.91 ($162.48) $123,176.19
19 $123,176.19 ($676.40) $ 513.23 ($163.16) $123,013.03
20 $123,013.03 ($676.40) $ 512.55 ($163.84) $122,849.19
21 $122,849.19 ($676.40) $ 511.87 ($164.52) $122,684.67
22 $122,684.67 ($676.40) $ 511.19 ($165.21) $122,519.46
23 $122,519.46 ($676.40) $ 510.50 ($165.90) $122,353.56
24 $122,353.56 ($676.40) $ 509.81 ($166.59) $122,186.97
25 $122,186.97 ($676.40) $ 509.11 ($167.28) $122,019.69
26 $122,019.69 ($676.40) $ 508.42 ($167.98) $121,851.71
27 $121,851.71 ($676.40) $ 507.72 ($168.68) $121,683.03
28 $121,683.03 ($676.40) $ 507.01 ($169.38) $121,513.65
29 $121,513.65 ($676.40) $ 506.31 ($170.09) $121,343.56
30 $121,343.56 ($676.40) $ 505.60 ($170.80) $121,172.76
31 $121,172.76 ($676.40) $ 504.89 ($171.51) $121,001.25
32 $121,001.25 ($676.40) $ 504.17 ($172.22) $120,829.03
33 $120,829.03 ($676.40) $ 503.45 ($172.94) $120,656.09
34 $120,656.09 ($676.40) $ 502.73 ($173.66) $120,482.43
35 $120,482.43 ($676.40) $ 502.01 ($174.39) $120,308.04
36 $120,308.04 ($676.40) $ 501.28 ($175.11) $120,132.93
37 $120,132.93 ($676.40) $ 500.55 ($175.84) $119,957.09
38 $119,957.09 ($676.40) $ 499.82 ($176.57) $119,780.51
39 $119,780.51 ($676.40) $ 499.09 ($177.31) $119,603.20
40 $119,603.20 ($676.40) $ 498.35 ($178.05) $119,425.16
41 $119,425.16 ($676.40) $ 497.60 ($178.79) $119,246.37
42 $119,246.37 ($676.40) $ 496.86 ($179.54) $119,066.83
43 $119,066.83 ($676.40) $ 496.11 ($180.28) $118,886.55
44 $118,886.55 ($676.40) $ 495.36 ($181.03) $118,705.51
45 $118,705.51 ($676.40) $ 494.61 ($181.79) $118,523.72
46 $118,523.72 ($676.40) $ 493.85 ($182.55) $118,341.18
47 $118,341.18 ($676.40) $ 493.09 ($183.31) $118,157.87
48 $118,157.87 ($676.40) $ 492.32 ($184.07) $117,973.80
49 $117,973.80 ($676.40) $ 491.56 ($184.84) $117,788.96
50 $117,788.96 ($676.40) $ 490.79 ($185.61) $117,603.35
51 $117,603.35 ($676.40) $ 490.01 ($186.38) $117,416.97
52 $117,416.97 ($676.40) $ 489.24 ($187.16) $117,229.81
4
53 $117,229.81 ($676.40) $ 488.46 ($187.94) $117,041.88
54 $117,041.88 ($676.40) $ 487.67 ($188.72) $116,853.16
55 $116,853.16 ($676.40) $ 486.89 ($189.51) $116,663.65
56 $116,663.65 ($676.40) $ 486.10 ($190.30) $116,473.35
57 $116,473.35 ($676.40) $ 485.31 ($191.09) $116,282.26
58 $116,282.26 ($676.40) $ 484.51 ($191.89) $116,090.38
59 $116,090.38 ($676.40) $ 483.71 ($192.69) $115,897.69
60 $115,897.69 ($676.40) $ 482.91 ($193.49) $115,704.20
61 $115,704.20 ($676.40) $ 482.10 ($194.29) $115,509.91
62 $115,509.91 ($676.40) $ 481.29 ($195.10) $115,314.80
63 $115,314.80 ($676.40) $ 480.48 ($195.92) $115,118.89
64 $115,118.89 ($676.40) $ 479.66 ($196.73) $114,922.15
65 $114,922.15 ($676.40) $ 478.84 ($197.55) $114,724.60
66 $114,724.60 ($676.40) $ 478.02 ($198.38) $114,526.22
67 $114,526.22 ($676.40) $ 477.19 ($199.20) $114,327.02
68 $114,327.02 ($676.40) $ 476.36 ($200.03) $114,126.99
69 $114,126.99 ($676.40) $ 475.53 ($200.87) $113,926.12
70 $113,926.12 ($676.40) $ 474.69 ($201.70) $113,724.42
71 $113,724.42 ($676.40) $ 473.85 ($202.54) $113,521.88
72 $113,521.88 ($676.40) $ 473.01 ($203.39) $113,318.49
73 $113,318.49 ($676.40) $ 472.16 ($204.23) $113,114.25
74 $113,114.25 ($676.40) $ 471.31 ($205.09) $112,909.17
75 $112,909.17 ($676.40) $ 470.45 ($205.94) $112,703.23
76 $112,703.23 ($676.40) $ 469.60 ($206.80) $112,496.43
77 $112,496.43 ($676.40) $ 468.74 ($207.66) $112,288.77
78 $112,288.77 ($676.40) $ 467.87 ($208.53) $112,080.24
79 $112,080.24 ($676.40) $ 467.00 ($209.39) $111,870.85
80 $111,870.85 ($676.40) $ 466.13 ($210.27) $111,660.58
81 $111,660.58 ($676.40) $ 465.25 ($211.14) $111,449.44
82 $111,449.44 ($676.40) $ 464.37 ($212.02) $111,237.42
83 $111,237.42 ($676.40) $ 463.49 ($212.91) $111,024.51
84 $111,024.51 ($676.40) $ 462.60 ($213.79) $110,810.72
85 $110,810.72 ($676.40) $ 461.71 ($214.68) $110,596.04
86 $110,596.04 ($676.40) $ 460.82 ($215.58) $110,380.46
87 $110,380.46 ($676.40) $ 459.92 ($216.48) $110,163.98
88 $110,163.98 ($676.40) $ 459.02 ($217.38) $109,946.60
89 $109,946.60 ($676.40) $ 458.11 ($218.28) $109,728.32
90 $109,728.32 ($676.40) $ 457.20 ($219.19) $109,509.12
91 $109,509.12 ($676.40) $ 456.29 ($220.11) $109,289.02
92 $109,289.02 ($676.40) $ 455.37 ($221.02) $109,067.99
93 $109,067.99 ($676.40) $ 454.45 ($221.95) $108,846.05
94 $108,846.05 ($676.40) $ 453.53 ($222.87) $108,623.18
95 $108,623.18 ($676.40) $ 452.60 ($223.80) $108,399.38
96 $108,399.38 ($676.40) $ 451.66 ($224.73) $108,174.65
97 $108,174.65 ($676.40) $ 450.73 ($225.67) $107,948.98
98 $107,948.98 ($676.40) $ 449.79 ($226.61) $107,722.37
99 $107,722.37 ($676.40) $ 448.84 ($227.55) $107,494.82
100 $107,494.82 ($676.40) $ 447.90 ($228.50) $107,266.32
101 $107,266.32 ($676.40) $ 446.94 ($229.45) $107,036.87
102 $107,036.87 ($676.40) $ 445.99 ($230.41) $106,806.46
103 $106,806.46 ($676.40) $ 445.03 ($231.37) $106,575.09
104 $106,575.09 ($676.40) $ 444.06 ($232.33) $106,342.76
105 $106,342.76 ($676.40) $ 443.09 ($233.30) $106,109.46
106 $106,109.46 ($676.40) $ 442.12 ($234.27) $105,875.18
107 $105,875.18 ($676.40) $ 441.15 ($235.25) $105,639.94
5
108 $105,639.94 ($676.40) $ 440.17 ($236.23) $105,403.71
109 $105,403.71 ($676.40) $ 439.18 ($237.21) $105,166.49
110 $105,166.49 ($676.40) $ 438.19 ($238.20) $104,928.29
111 $104,928.29 ($676.40) $ 437.20 ($239.19) $104,689.10
112 $104,689.10 ($676.40) $ 436.20 ($240.19) $104,448.91
113 $104,448.91 ($676.40) $ 435.20 ($241.19) $104,207.72
114 $104,207.72 ($676.40) $ 434.20 ($242.20) $103,965.52
115 $103,965.52 ($676.40) $ 433.19 ($243.21) $103,722.31
116 $103,722.31 ($676.40) $ 432.18 ($244.22) $103,478.10
117 $103,478.10 ($676.40) $ 431.16 ($245.24) $103,232.86
118 $103,232.86 ($676.40) $ 430.14 ($246.26) $102,986.60
119 $102,986.60 ($676.40) $ 429.11 ($247.28) $102,739.32
120 $102,739.32 ($676.40) $ 428.08 ($248.31) $102,491.00
121 $102,491.00 ($676.40) $ 427.05 ($249.35) $102,241.65
122 $102,241.65 ($676.40) $ 426.01 ($250.39) $101,991.26
123 $101,991.26 ($676.40) $ 424.96 ($251.43) $101,739.83
124 $101,739.83 ($676.40) $ 423.92 ($252.48) $101,487.35
125 $101,487.35 ($676.40) $ 422.86 ($253.53) $101,233.82
126 $101,233.82 ($676.40) $ 421.81 ($254.59) $100,979.23
127 $100,979.23 ($676.40) $ 420.75 ($255.65) $100,723.59
128 $100,723.59 ($676.40) $ 419.68 ($256.71) $100,466.87
129 $100,466.87 ($676.40) $ 418.61 ($257.78) $100,209.09
130 $100,209.09 ($676.40) $ 417.54 ($258.86) $99,950.23
131 $99,950.23 ($676.40) $ 416.46 ($259.94) $99,690.29
132 $99,690.29 ($676.40) $ 415.38 ($261.02) $99,429.28
133 $99,429.28 ($676.40) $ 414.29 ($262.11) $99,167.17
134 $99,167.17 ($676.40) $ 413.20 ($263.20) $98,903.97
135 $98,903.97 ($676.40) $ 412.10 ($264.30) $98,639.68
136 $98,639.68 ($676.40) $ 411.00 ($265.40) $98,374.28
137 $98,374.28 ($676.40) $ 409.89 ($266.50) $98,107.78
138 $98,107.78 ($676.40) $ 408.78 ($267.61) $97,840.16
139 $97,840.16 ($676.40) $ 407.67 ($268.73) $97,571.44
140 $97,571.44 ($676.40) $ 406.55 ($269.85) $97,301.59
141 $97,301.59 ($676.40) $ 405.42 ($270.97) $97,030.62
142 $97,030.62 ($676.40) $ 404.29 ($272.10) $96,758.51
143 $96,758.51 ($676.40) $ 403.16 ($273.23) $96,485.28
144 $96,485.28 ($676.40) $ 402.02 ($274.37) $96,210.91
145 $96,210.91 ($676.40) $ 400.88 ($275.52) $95,935.39
146 $95,935.39 ($676.40) $ 399.73 ($276.66) $95,658.73
147 $95,658.73 ($676.40) $ 398.58 ($277.82) $95,380.91
148 $95,380.91 ($676.40) $ 397.42 ($278.97) $95,101.93
149 $95,101.93 ($676.40) $ 396.26 ($280.14) $94,821.80
150 $94,821.80 ($676.40) $ 395.09 ($281.30) $94,540.49
151 $94,540.49 ($676.40) $ 393.92 ($282.48) $94,258.02
152 $94,258.02 ($676.40) $ 392.74 ($283.65) $93,974.36
153 $93,974.36 ($676.40) $ 391.56 ($284.84) $93,689.53
154 $93,689.53 ($676.40) $ 390.37 ($286.02) $93,403.50
155 $93,403.50 ($676.40) $ 389.18 ($287.21) $93,116.29
156 $93,116.29 ($676.40) $ 387.98 ($288.41) $92,827.88
157 $92,827.88 ($676.40) $ 386.78 ($289.61) $92,538.27
158 $92,538.27 ($676.40) $ 385.58 ($290.82) $92,247.45
159 $92,247.45 ($676.40) $ 384.36 ($292.03) $91,955.42
160 $91,955.42 ($676.40) $ 383.15 ($293.25) $91,662.17
161 $91,662.17 ($676.40) $ 381.93 ($294.47) $91,367.70
162 $91,367.70 ($676.40) $ 380.70 ($295.70) $91,072.00
6
163 $91,072.00 ($676.40) $ 379.47 ($296.93) $90,775.08
164 $90,775.08 ($676.40) $ 378.23 ($298.17) $90,476.91
165 $90,476.91 ($676.40) $ 376.99 ($299.41) $90,177.50
166 $90,177.50 ($676.40) $ 375.74 ($300.66) $89,876.85
167 $89,876.85 ($676.40) $ 374.49 ($301.91) $89,574.94
168 $89,574.94 ($676.40) $ 373.23 ($303.17) $89,271.77
169 $89,271.77 ($676.40) $ 371.97 ($304.43) $88,967.34
170 $88,967.34 ($676.40) $ 370.70 ($305.70) $88,661.64
171 $88,661.64 ($676.40) $ 369.42 ($306.97) $88,354.67
172 $88,354.67 ($676.40) $ 368.14 ($308.25) $88,046.42
173 $88,046.42 ($676.40) $ 366.86 ($309.54) $87,736.89
174 $87,736.89 ($676.40) $ 365.57 ($310.82) $87,426.06
175 $87,426.06 ($676.40) $ 364.28 ($312.12) $87,113.94
176 $87,113.94 ($676.40) $ 362.97 ($313.42) $86,800.52
177 $86,800.52 ($676.40) $ 361.67 ($314.73) $86,485.79
178 $86,485.79 ($676.40) $ 360.36 ($316.04) $86,169.76
179 $86,169.76 ($676.40) $ 359.04 ($317.35) $85,852.40
180 $85,852.40 ($676.40) $ 357.72 ($318.68) $85,533.72
181 $85,533.72 ($676.40) $ 356.39 ($320.00) $85,213.72
182 $85,213.72 ($676.40) $ 355.06 ($321.34) $84,892.38
183 $84,892.38 ($676.40) $ 353.72 ($322.68) $84,569.71
184 $84,569.71 ($676.40) $ 352.37 ($324.02) $84,245.68
185 $84,245.68 ($676.40) $ 351.02 ($325.37) $83,920.31
186 $83,920.31 ($676.40) $ 349.67 ($326.73) $83,593.58
187 $83,593.58 ($676.40) $ 348.31 ($328.09) $83,265.50
188 $83,265.50 ($676.40) $ 346.94 ($329.46) $82,936.04
189 $82,936.04 ($676.40) $ 345.57 ($330.83) $82,605.21
190 $82,605.21 ($676.40) $ 344.19 ($332.21) $82,273.01
191 $82,273.01 ($676.40) $ 342.80 ($333.59) $81,939.41
192 $81,939.41 ($676.40) $ 341.41 ($334.98) $81,604.43
193 $81,604.43 ($676.40) $ 340.02 ($336.38) $81,268.06
194 $81,268.06 ($676.40) $ 338.62 ($337.78) $80,930.28
195 $80,930.28 ($676.40) $ 337.21 ($339.19) $80,591.09
196 $80,591.09 ($676.40) $ 335.80 ($340.60) $80,250.49
197 $80,250.49 ($676.40) $ 334.38 ($342.02) $79,908.48
198 $79,908.48 ($676.40) $ 332.95 ($343.44) $79,565.03
199 $79,565.03 ($676.40) $ 331.52 ($344.87) $79,220.16
200 $79,220.16 ($676.40) $ 330.08 ($346.31) $78,873.85
201 $78,873.85 ($676.40) $ 328.64 ($347.75) $78,526.09
202 $78,526.09 ($676.40) $ 327.19 ($349.20) $78,176.89
203 $78,176.89 ($676.40) $ 325.74 ($350.66) $77,826.23
204 $77,826.23 ($676.40) $ 324.28 ($352.12) $77,474.11
205 $77,474.11 ($676.40) $ 322.81 ($353.59) $77,120.52
206 $77,120.52 ($676.40) $ 321.34 ($355.06) $76,765.47
207 $76,765.47 ($676.40) $ 319.86 ($356.54) $76,408.93
208 $76,408.93 ($676.40) $ 318.37 ($358.02) $76,050.90
209 $76,050.90 ($676.40) $ 316.88 ($359.52) $75,691.38
210 $75,691.38 ($676.40) $ 315.38 ($361.01) $75,330.37
211 $75,330.37 ($676.40) $ 313.88 ($362.52) $74,967.85
212 $74,967.85 ($676.40) $ 312.37 ($364.03) $74,603.82
213 $74,603.82 ($676.40) $ 310.85 ($365.55) $74,238.28
214 $74,238.28 ($676.40) $ 309.33 ($367.07) $73,871.21
215 $73,871.21 ($676.40) $ 307.80 ($368.60) $73,502.61
216 $73,502.61 ($676.40) $ 306.26 ($370.13) $73,132.47
217 $73,132.47 ($676.40) $ 304.72 ($371.68) $72,760.80
7
218 $72,760.80 ($676.40) $ 303.17 ($373.23) $72,387.57
219 $72,387.57 ($676.40) $ 301.61 ($374.78) $72,012.79
220 $72,012.79 ($676.40) $ 300.05 ($376.34) $71,636.45
221 $71,636.45 ($676.40) $ 298.49 ($377.91) $71,258.54
222 $71,258.54 ($676.40) $ 296.91 ($379.48) $70,879.06
223 $70,879.06 ($676.40) $ 295.33 ($381.07) $70,497.99
224 $70,497.99 ($676.40) $ 293.74 ($382.65) $70,115.34
225 $70,115.34 ($676.40) $ 292.15 ($384.25) $69,731.09
226 $69,731.09 ($676.40) $ 290.55 ($385.85) $69,345.24
227 $69,345.24 ($676.40) $ 288.94 ($387.46) $68,957.78
228 $68,957.78 ($676.40) $ 287.32 ($389.07) $68,568.71
229 $68,568.71 ($676.40) $ 285.70 ($390.69) $68,178.02
230 $68,178.02 ($676.40) $ 284.08 ($392.32) $67,785.70
231 $67,785.70 ($676.40) $ 282.44 ($393.95) $67,391.74
232 $67,391.74 ($676.40) $ 280.80 ($395.60) $66,996.15
233 $66,996.15 ($676.40) $ 279.15 ($397.24) $66,598.90
234 $66,598.90 ($676.40) $ 277.50 ($398.90) $66,200.00
235 $66,200.00 ($676.40) $ 275.83 ($400.56) $65,799.44
236 $65,799.44 ($676.40) $ 274.16 ($402.23) $65,397.21
237 $65,397.21 ($676.40) $ 272.49 ($403.91) $64,993.30
238 $64,993.30 ($676.40) $ 270.81 ($405.59) $64,587.71
239 $64,587.71 ($676.40) $ 269.12 ($407.28) $64,180.43
240 $64,180.43 ($676.40) $ 267.42 ($408.98) $63,771.46
241 $63,771.46 ($676.40) $ 265.71 ($410.68) $63,360.78
242 $63,360.78 ($676.40) $ 264.00 ($412.39) $62,948.38
243 $62,948.38 ($676.40) $ 262.28 ($414.11) $62,534.27
244 $62,534.27 ($676.40) $ 260.56 ($415.84) $62,118.44
245 $62,118.44 ($676.40) $ 258.83 ($417.57) $61,700.87
246 $61,700.87 ($676.40) $ 257.09 ($419.31) $61,281.56
247 $61,281.56 ($676.40) $ 255.34 ($421.06) $60,860.51
248 $60,860.51 ($676.40) $ 253.59 ($422.81) $60,437.70
249 $60,437.70 ($676.40) $ 251.82 ($424.57) $60,013.12
250 $60,013.12 ($676.40) $ 250.05 ($426.34) $59,586.78
251 $59,586.78 ($676.40) $ 248.28 ($428.12) $59,158.67
252 $59,158.67 ($676.40) $ 246.49 ($429.90) $58,728.77
253 $58,728.77 ($676.40) $ 244.70 ($431.69) $58,297.07
254 $58,297.07 ($676.40) $ 242.90 ($433.49) $57,863.58
255 $57,863.58 ($676.40) $ 241.10 ($435.30) $57,428.29
256 $57,428.29 ($676.40) $ 239.28 ($437.11) $56,991.18
257 $56,991.18 ($676.40) $ 237.46 ($438.93) $56,552.24
258 $56,552.24 ($676.40) $ 235.63 ($440.76) $56,111.48
259 $56,111.48 ($676.40) $ 233.80 ($442.60) $55,668.89
260 $55,668.89 ($676.40) $ 231.95 ($444.44) $55,224.44
261 $55,224.44 ($676.40) $ 230.10 ($446.29) $54,778.15
262 $54,778.15 ($676.40) $ 228.24 ($448.15) $54,330.00
263 $54,330.00 ($676.40) $ 226.37 ($450.02) $53,879.98
264 $53,879.98 ($676.40) $ 224.50 ($451.90) $53,428.08
265 $53,428.08 ($676.40) $ 222.62 ($453.78) $52,974.30
266 $52,974.30 ($676.40) $ 220.73 ($455.67) $52,518.63
267 $52,518.63 ($676.40) $ 218.83 ($457.57) $52,061.07
268 $52,061.07 ($676.40) $ 216.92 ($459.47) $51,601.59
269 $51,601.59 ($676.40) $ 215.01 ($461.39) $51,140.20
270 $51,140.20 ($676.40) $ 213.08 ($463.31) $50,676.89
271 $50,676.89 ($676.40) $ 211.15 ($465.24) $50,211.65
272 $50,211.65 ($676.40) $ 209.22 ($467.18) $49,744.47
8
273 $49,744.47 ($676.40) $ 207.27 ($469.13) $49,275.35
274 $49,275.35 ($676.40) $ 205.31 ($471.08) $48,804.26
275 $48,804.26 ($676.40) $ 203.35 ($473.04) $48,331.22
276 $48,331.22 ($676.40) $ 201.38 ($475.02) $47,856.20
277 $47,856.20 ($676.40) $ 199.40 ($476.99) $47,379.21
278 $47,379.21 ($676.40) $ 197.41 ($478.98) $46,900.23
279 $46,900.23 ($676.40) $ 195.42 ($480.98) $46,419.25
280 $46,419.25 ($676.40) $ 193.41 ($482.98) $45,936.27
281 $45,936.27 ($676.40) $ 191.40 ($484.99) $45,451.27
282 $45,451.27 ($676.40) $ 189.38 ($487.01) $44,964.26
283 $44,964.26 ($676.40) $ 187.35 ($489.04) $44,475.22
284 $44,475.22 ($676.40) $ 185.31 ($491.08) $43,984.13
285 $43,984.13 ($676.40) $ 183.27 ($493.13) $43,491.01
286 $43,491.01 ($676.40) $ 181.21 ($495.18) $42,995.82
287 $42,995.82 ($676.40) $ 179.15 ($497.25) $42,498.58
288 $42,498.58 ($676.40) $ 177.08 ($499.32) $41,999.26
289 $41,999.26 ($676.40) $ 175.00 ($501.40) $41,497.86
290 $41,497.86 ($676.40) $ 172.91 ($503.49) $40,994.37
291 $40,994.37 ($676.40) $ 170.81 ($505.59) $40,488.79
292 $40,488.79 ($676.40) $ 168.70 ($507.69) $39,981.10
293 $39,981.10 ($676.40) $ 166.59 ($509.81) $39,471.29
294 $39,471.29 ($676.40) $ 164.46 ($511.93) $38,959.36
295 $38,959.36 ($676.40) $ 162.33 ($514.06) $38,445.29
296 $38,445.29 ($676.40) $ 160.19 ($516.21) $37,929.09
297 $37,929.09 ($676.40) $ 158.04 ($518.36) $37,410.73
298 $37,410.73 ($676.40) $ 155.88 ($520.52) $36,890.21
299 $36,890.21 ($676.40) $ 153.71 ($522.69) $36,367.53
300 $36,367.53 ($676.40) $ 151.53 ($524.86) $35,842.66
301 $35,842.66 ($676.40) $ 149.34 ($527.05) $35,315.61
302 $35,315.61 ($676.40) $ 147.15 ($529.25) $34,786.36
303 $34,786.36 ($676.40) $ 144.94 ($531.45) $34,254.91
304 $34,254.91 ($676.40) $ 142.73 ($533.67) $33,721.25
305 $33,721.25 ($676.40) $ 140.51 ($535.89) $33,185.36
306 $33,185.36 ($676.40) $ 138.27 ($538.12) $32,647.23
307 $32,647.23 ($676.40) $ 136.03 ($540.37) $32,106.87
308 $32,106.87 ($676.40) $ 133.78 ($542.62) $31,564.25
309 $31,564.25 ($676.40) $ 131.52 ($544.88) $31,019.37
310 $31,019.37 ($676.40) $ 129.25 ($547.15) $30,472.23
311 $30,472.23 ($676.40) $ 126.97 ($549.43) $29,922.80
312 $29,922.80 ($676.40) $ 124.68 ($551.72) $29,371.08
313 $29,371.08 ($676.40) $ 122.38 ($554.02) $28,817.07
314 $28,817.07 ($676.40) $ 120.07 ($556.32) $28,260.74
315 $28,260.74 ($676.40) $ 117.75 ($558.64) $27,702.10
316 $27,702.10 ($676.40) $ 115.43 ($560.97) $27,141.13
317 $27,141.13 ($676.40) $ 113.09 ($563.31) $26,577.82
318 $26,577.82 ($676.40) $ 110.74 ($565.65) $26,012.17
319 $26,012.17 ($676.40) $ 108.38 ($568.01) $25,444.16
320 $25,444.16 ($676.40) $ 106.02 ($570.38) $24,873.78
321 $24,873.78 ($676.40) $ 103.64 ($572.75) $24,301.02
322 $24,301.02 ($676.40) $ 101.25 ($575.14) $23,725.88
323 $23,725.88 ($676.40) $ 98.86 ($577.54) $23,148.35
324 $23,148.35 ($676.40) $ 96.45 ($579.94) $22,568.40
325 $22,568.40 ($676.40) $ 94.04 ($582.36) $21,986.04
326 $21,986.04 ($676.40) $ 91.61 ($584.79) $21,401.25
327 $21,401.25 ($676.40) $ 89.17 ($587.22) $20,814.03
9
328 $20,814.03 ($676.40) $ 86.73 ($589.67) $20,224.36
329 $20,224.36 ($676.40) $ 84.27 ($592.13) $19,632.23
330 $19,632.23 ($676.40) $ 81.80 ($594.59) $19,037.64
331 $19,037.64 ($676.40) $ 79.32 ($597.07) $18,440.57
332 $18,440.57 ($676.40) $ 76.84 ($599.56) $17,841.01
333 $17,841.01 ($676.40) $ 74.34 ($602.06) $17,238.95
334 $17,238.95 ($676.40) $ 71.83 ($604.57) $16,634.38
335 $16,634.38 ($676.40) $ 69.31 ($607.09) $16,027.30
336 $16,027.30 ($676.40) $ 66.78 ($609.61) $15,417.68
337 $15,417.68 ($676.40) $ 64.24 ($612.15) $14,805.53
338 $14,805.53 ($676.40) $ 61.69 ($614.71) $14,190.82
339 $14,190.82 ($676.40) $ 59.13 ($617.27) $13,573.56
340 $13,573.56 ($676.40) $ 56.56 ($619.84) $12,953.72
341 $12,953.72 ($676.40) $ 53.97 ($622.42) $12,331.30
342 $12,331.30 ($676.40) $ 51.38 ($625.01) $11,706.28
343 $11,706.28 ($676.40) $ 48.78 ($627.62) $11,078.66
344 $11,078.66 ($676.40) $ 46.16 ($630.23) $10,448.43
345 $10,448.43 ($676.40) $ 43.54 ($632.86) $9,815.57
346 $9,815.57 ($676.40) $ 40.90 ($635.50) $9,180.07
347 $9,180.07 ($676.40) $ 38.25 ($638.14) $8,541.93
348 $8,541.93 ($676.40) $ 35.59 ($640.80) $7,901.12
349 $7,901.12 ($676.40) $ 32.92 ($643.47) $7,257.65
350 $7,257.65 ($676.40) $ 30.24 ($646.16) $6,611.49
351 $6,611.49 ($676.40) $ 27.55 ($648.85) $5,962.65
352 $5,962.65 ($676.40) $ 24.84 ($651.55) $5,311.10
353 $5,311.10 ($676.40) $ 22.13 ($654.27) $4,656.83
354 $4,656.83 ($676.40) $ 19.40 ($656.99) $3,999.84
355 $3,999.84 ($676.40) $ 16.67 ($659.73) $3,340.11
356 $3,340.11 ($676.40) $ 13.92 ($662.48) $2,677.63
357 $2,677.63 ($676.40) $ 11.16 ($665.24) $2,012.39
358 $2,012.39 ($676.40) $ 8.38 ($668.01) $1,344.38
359 $1,344.38 ($676.40) $ 5.60 ($670.79) $673.59
360 $673.59 ($676.40) $ 2.81 ($673.59) $0.00
10
6. If the Hall’s want to have as much of an after-tax income when they retire as they
currently have, and assuming they live until they are 80 years old, how much money
should they set aside each month so as to have enough money accumulated in their
retirement nest egg? Assume that annual inflation rate is 4% per year for the whole
term, the investment return is 8% per year before and after retirement, and that their
tax rate is 28% throughout their life.
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7. If the Hall’s continue paying the minimum 3% on their credit card debt each month, how long will
it take them to pay it off and how much total interest will they have paid? If you were Dan, what
would you advice them to do?
Dan's Advice
1. Continue paying minimum on:
Car ($221.58)
College Loans ($527.80)
2. Live cheap for the next few months and pay maximum available on credit card debt
Available income after rent, car payment, and college loan payments = $2,550.62
They should be able to clear the debt within 6 months.
3. Then start putting money away towards the house down payment, child's education, and
retirement
Down payment ($1,326.92)
Child's education ($319.28)
Retirement plan ($1,044.04)
Note...They may have to save a little less than the calculated amount each month…
($2,690.23)
4. Within 24 months, their college loans will be paid off, the deposit towards the down payment will have
ended, and they could work towards paying off their mortgage as quickly as possible.
12