2301_LG1-2 Project (1) (1)

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Texas Tech University *

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3321

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Finance

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Feb 20, 2024

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3

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PFI 2301: Personal Financial Literacy LG1 & 2 Project LG1-Q1 LG2-Q2 Life Goal To live life to the fullest. S Be able to have time to spend time with my family and do things I could not as a child M In a span of over ten years I hope to start my path to having more time for life itself. A To attain a family R Having Kids to spend time with and teach to be better people T Needing to get a wife and start working in my career. Financial Goal To become financially free S To create passive income M To have enough passive income to not have to work anymore A through real estate I would obtain houses and live off of their rent. R Realestate is my career that I wish to pursue in the future. T Takes time to build a portfolio and to have enough money to invest in properties. Focus on YOU! 1) Define financial literacy and 2) how does financial literacy relate to the life cycle stage you're currently in. (type responses, no calculations needed) Financial literacy is being able to understand how to calculate, undertsand and work with money to make better financial decisions. Financial literacy relates to my life cycle in now starting to be my own person, make my own money and spend my own money even though it isnt much compared to adults. Being able to understand it will help me be able to grow my money and make better decisions with my money. Focus on YOU! Create one life and one financial goal using the SMART goal process. State each goal below, then make the goal SMART! (type responses, no calculations needed)
LG2-Q3 NPER PMT PV FV From the scenario type out the TVM inputs in the cells. FV PV 12 3.500 #N/A LG2-Q4 NPER PMT PV FV From the scenario type out the TVM inputs in the cells. RATE PV 12 #N/A LG2-Q5 NPER PMT PV FV From the scenario type out the TVM inputs in the cells. FV NPER 1 #N/A LG2-Q6 NPER PMT PV FV From the scenario type out the TVM inputs in the cells. RATE PV 1 #N/A LG2-Q7 NPER PMT PV FV From the scenario type out the TVM inputs in the cells. FV PMT 12 #N/A Note: RATE = % / Compounding # Note: NPER * Compounding # LG2-Q8 NPER PMT PV FV ANSWER What would the quarterly interest rate be needed to reach this goal? 52 #N/A LG2-Q9 NPER PMT PV FV ANSWER What would be the monthly payment to reach this goal? #N/A LG2-Q10 NPER PMT PV FV ANSWER How many months will it take to complete this goal? #N/A LG2-Q11 NPER PMT PV FV ANSWER How much must be deposited today in the account to reach this goal? #N/A LG2-Q12 NPER PMT PV FV ANSWER What is the potential balance of this account in 20 years? Application Time! Facts about Jessica - Complete the following TVM questions (Q3- Q7). Here you will be provided with additional guidance, use the dropdown boxes for 'a-c' to help calculate the TVM problem. Hint: A negative sign can also result in what you're solving for Hint: 1= Annually, 2= Semi- Annually, 4= Qtr., 12= Monthly, 52= Weekly, 365=Daily Note: RATE = % / Compounding # Note: NPER * Compounding # Jessica was thinking of making an investment for $6000. She expects it to increase in value at a rate of 3.5% compounded annually for the next five years. How much will the investment be worth at the end of the fifth year? a) Solving For? (select from dropdown) b) Which input is negative? (type TVM input(s) below) c) Compounding Number (select from dropdown) RATE In college, Jessica borrowed $3200 from her father to study abroad. She paid back $4000 to her father at the end of 4 years. What was the average annual compound rate of interest on the loan from her father? a) Solving For? (select from dropdown) b) Which input is negative? (type TVM input(s) below) c) Compounding Number (select from dropdown) RATE Jessica would like to open a savings account. How many years will it take $2500 to grow to $4500 with an interest rate of 3.0%? a) Solving For? (select from dropdown) b) Which input is negative? (type TVM input(s) below) c) Compounding Number (select from dropdown) RATE Jessica's grandparents opened a savings account when she was born and could access the funds when she turned 18. The account is currently at $16000 and grew at a rate of 2%. What was the initial amount invested? a) Solving For? (select from dropdown) b) Which input is negative? (type TVM input(s) below) c) Compounding Number (select from dropdown) RATE Jessica would like to go on a cruise in one year. The total trip costs $1500. She is thinking of placing the funds in an account that earns a little interest - she found an account with .5% interest. To reach this goal, how much would Jessica need to contribute to this account monthly? a) Solving For? (select from dropdown) b) Which input is negative? (type TVM input(s) below) c) Compounding Number (select from dropdown) RATE Application Time! 1) You will type the TVM inputs in the table provided from the "Info Sheet". 2) Mirror the inputs from the "Info Sheet" to the TVM cells provided. 3) Within the TVM cells, if needed, compound. 4) In the "ANSWER" cell show us your TVM calculation. Goal 1: Opened an account with $1500, with the hope to have a total of $2500 saved in an emergency fund within one year (no additional payments). Compounding Number (select from dropdown) RATE Goal 2: A credit card balance of $2000 with an 15% rate. The goal is to pay off the credit card by the end of the year. (future is a $0 balance) Compounding Number (select from dropdown) RATE Goal 3: Student loan balance of $18,000 at 6.5% and making $425 monthly payments. (future is a $0 balance) Compounding Number (select from dropdown) RATE Goal 4: Save $15000 in an account with 15% for a down payment on a home in 6 years. (no additional payments) Compounding Number (select from dropdown) RATE Goal 5: Open a Roth IRA at 5% for 20 years and contribute $1500 on a semi- annual basis. Compounding Number (select from dropdown) RATE
PFI 2301: Personal Financial Literacy Information Sheet Unit 1: BASICS - The Tools and the Rules of Personal Finance LG1-Understand financial literacy and how it relates to the financial planning process over the life cycle. LG2-Understand opportunity cost and the time value of money calculations in relation to financial goals. Short-Term RATE NPER PMT PV FV RATE NPER PMT PV FV Intermediate-Term RATE NPER PMT PV FV RATE NPER PMT PV FV Long-Term RATE NPER PMT PV FV Project Overview: Throughout the semester, you will be working on an application based scenario on how to apply the course learning goals. All projects will be submitted through Excel. The "Info Sheet" (where you're now) will be the landing page for all of the information to complete each Learning Goal Project. Make sure to keep up with the schedule for the due dates and review the rubrics to make sure you know how each Project will be graded. Let's get started! Your Role: Fast forward, and you have recently graduated from college, and you remember taking PFI 2301 and are super excited to be financially literate as you enter your first career- related job. However, your friend did not take PFI 2301 and is trying to figure what to do with their finances. They have contacted you for some guidance. Being the awesome friend you are, you agree to walk them through the four personal finance elements (Basics, Borrowing, Building, & Protecting) you learned in class! Scenario: Get started reviewing the information under "Unit 1: Basics" to learn more about your friend, Jessica's financial situation. FINANCIAL GOALS (Q8-Q12) - Based on the scenario, type the TVM inputs in the table to figure out what you are solving for (no additional compounding steps here). Goal 1: Opened an account with $1500, with the hope to have a total of $2500 saved in an emergency fund within one year (no additional payments). Goal 2: A credit card balance of $2000 with an 15% rate. The goal is to pay off the credit card by the end of the year. (future is a $0 balance) Goal 3: Student loan balance of $18,000 at 6.5% and making $425 monthly payments. (future is a $0 balance) Goal 4: Save $15000 in an account with 15% interest for a down payment on a home in 6 years. (no additional payments) Goal 5: Open a Roth IRA at 5% for 20 years and contribute $1500 on a semi-annual basis.
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