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Hi, i just need the highlighted ones. Thank you!

CHAPTER 1 Understanding Personal Finance 33 LET'S TALK ABOUT IT 1. Economic Growth. What tpes of federal government Federal Reserve. Describe some economic circumstances that might persuade the Federal Reserve to lower short-term inter- ctfoets to help stimulate economic growth affect 2 The Business Cycle. Where is the United States in the economic cycle now, and where does it seem to be heading? List some indicators that suggest in which direction it may move Opportunity Costs. People regularly make Pa 13 decisions in personal finance that have op portunity costs. List three financial decisions you have made recently, and identify the opportunity cont for each 3. Personal Finance Mistakes. What are some common mistakes that people make in personal finance two that might be the wort, and why! Name Inherited Money. What would you do if you inberited $3,000 from an aunt? ldentify three options DO THE MATH 1 Real Income. Joshua Vermier of Sacra mento, California, received a raise after his first year on the job to $45,800 from his initial salary of $44,000. What wa DO IT IN CLASS loshua's raise stated as a percentage? If ae 12 inflation averaged 2.8 percent for the year what was his real income after the raise? What was his real raise stated as a percentage she begins an investment program of $2,400 per year in an investment yielding 4 percent, what will be the value of the fund after three years (Hint: Use Appendix A.3 or the Garman/Forue companion website.) (d) Megan's Aunt Karroll told ber that she would give Megan $1,000 at the end of each year for the next three years to help with her college expenses. As suming an annual interest rate of 2 percent, what is the present value of that stream of payments? (Hint Usc Appendix A.4 or the Garman/Foryrwe compan- ion website.) 2 Future Value. As a graduating senior, Chun Kumora of Manhattan, Kansas, is eager to enter the job market at an anticipated an nual salary of $54,000. Assuming an aver po IT IN CLASS age inflation rate of 3 percent and an equal cost of-living raise, what will his salary possibly become in ten years? In 20 years? (Hint: Use Appendix A.1.) To make real economic progress, how much of a raise (in dollars) does Chun noed to receive next year and the year after? Present and Future Values. Megan Berry, a freshman horticulture major at the University of Minnesota, has some financial questions for the next three years of school and beyond. Answers to these questions can be obtained by using Appendix A or the Garman/Forgwe companion website Future Values. Using Table 1-1 on page 19, calculate the following: (a) The future value of lump-sum in vestment of S4,000 in four years that DO İT IN CLASS Pape 19 3, (b) The future value of $1,500 saved each ycar for three years that carns 6 percent (c) A person who invests $1,200 cach year finds one choice that is expected to pay 3 percnt per year and another choice that may pay 4 percent. What is the difference in return if the investment is made for four years? (a) If Megan's tuition, fees, and expenditures for books this year total $22,000, what will they be during her senior year (three years from now), assuming costs rise 4 percent annually?(Hint: Use Appendix A.1 or the Garman/Forwe companion website.) (d) The amount a person would need to deposit today with a 5 percent interest rate to have $2,000 in three years. 5 (b) Megan is applying for a scholarship currently valued Using the present and future value tables in Appendix A, the appropriate calculations on the Garman/Foru ar $5,000. If she is awarded it at the end of next year how much is the scholarship worth in today's dollars, assuming inflation of 3 percent? (Hint: Use Appendix A2 or the Garman/ Forgme companion website.) companion website, or a financial calculator, calculare the following (a) The amount a person would nced to deposit today to be able to withdraw $6,000 each year for ten years from an account earning (c) Megan is already looking ahead to graduation and a job, and she wants to buy a new car not long after her graduation. If after graduation

Answer 1

4 Initial Sala Final Sala $44,000 $45,800 Raise as % (Final Salary - Initial Salary)/Initial Salary 4.09% -(D&DS/D5 10 Hence Raise as % 4.09% 12 13 14 15 16 17 Inflation Final Sala 2.80% $45,800 Real Salany Nominal Salary (1+ inflation) $44,552.53D14/(1+D13 Hence real income after raise is 19 44,552.53 21 Real raise as a % (Real Income - Initial income)/Initial income 1.26% (019-DS/D5 23 Hence real raise as a %is 1.26%