Friday
August 29, 2014

Homework Help: I REALLY NEED HELP ON THIS--IM SO LOST.

Posted by Manny on Thursday, June 15, 2006 at 5:35am.

SOMEONE PLEASE HELP ME :( I AM SO LOST. I HAVE READ MY BOOK AND STILL CONFUSED. I HAVE TWO PROBLEMS BELOW AND EACH HAS ONE PART. THERE ARE SEVERAL MORE BUT I DON'T WANT TO ASK FOR TOO MUCH. PLEASE HELP ME ON THESE TWO. MY TEACHER SAID IT IS SIMPLE AND THAT IS WHY HE WON'T BE ABLE TO HELP ME. HE KEPT ON TELLING ME TO KEEP ON READING THE BOOK. IT'S ALMOST DUE TIME AND I AM GOING CRAZY TRYING TO GET THIS.

Bernie and Pam Britten are a young married couple beginning careers and establishing a household. They will each make about $50,000 next year and will have accumulated about $40,000 to invest. They now rent an apartment but are considering purchasing a condominium for $100,000. If they do, a down payment of $10,000 will be required.

They have discussed their situation with Lew McCarthy, an investment advisor and personal friend, and he has recommended the following investments:

The condominium - expected annual increase in market value = 5%.
Municipal bonds - expected annual yield = 5%.
High-yield corporate stocks - expected dividend yield = 8%.
Savings account in a commercial bank-expected annual yield = 3%.
High-growth common stocks - expected annual increase in market value = 10%; expected dividend yield = 0.
Calculate the after-tax yields on the foregoing investments, assuming the Brittens have a 28% marginal tax rate (based on Public Law 108-27, The Jobs and Growth Tax Relief Reconciliation Act of 2003).

--------------------------------------


Nancy Tai has recently opened a revolving charge account with MasterCard. Her credit limit is $1000, but she has not charged that much since opening the account. Nancy hasn't had the time to review her monthly statements as promptly as she should, but over the upcoming weekend, she plans to catch up on her work.

In reviewing November's statement, she notices that her beginning balance was $600 and that she made a $200 payment on November 10. She also charged purchases of $80 on November 5, $100 on November 15, and $50 on November 30. She can't tell how much interest she paid in November because she spilled watercolor paint on that portion of the statement. She does remember, though, seeing the letters APR and the number 16%. Also, the back of her statement indicates that interest was charged using the average daily balance method including current purchases, which considers the day of a charge or credit.

Assuming a 30-day period in November, calculate November's interest. Also, calculate the interest Nancy would have paid with: a) the previous balance method, b) the adjusted balance method.

--------------------------------------

NOTES:

Here is the tax-adjustment formula you need to use

Taxable yield Multiplied by (1- investor’s marginal tax bracket) = Tax adjusted yield


Problem: Which is a better investment? A Municipal bond ( tax free interest) with a yield of 6% or a corporate bond with a taxable yield of 7%? Assume that the investor is in the 25% marginal tax bracket. In this example, although the Muni. Bond pays a lower interest, the paid sum is NOT taxed to us. Therefore, we need to adjust the yield of the corporate bond DOWN, because although the corporate bond pays 7% interest, part of this interest is lost out to Uncle Sam, because it is taxable.

Here is how we use the Tax adjusted formula to solve this problem:
FORMULA:Taxable yield X (1- investor’s marginal tax bracket) = Tax adjusted yield……

So: 7% corp. TAXABLE bond X (1- .25) = .07 x .75=.0525 or 5.25%





"I really need help" is not the academic subject -- Econ is. Here's hoping an econ teacher will see this and respond.

=)


In part I of Manny's post, there is no question being asked. Is he asking for advise on possible investment decisions? In general, investment choices weigh risk against after-tax rates of return. Savings accounts are almost risk-free and have the lowest rates of return. Interest is taxable, so Manny should use the formula at the bottom of the post. Growth stocks are high risk/high rate of return. Special tax rates apply to capital gains from sale of stock, if held for 1 year or more. The current top rate is 15%. Munis and corporate bonds run the full range of risk. AAA bonds are very low risk, while so-called junk bonds are high risk. Munis are tax free, while the formula on the bottom of the post is appropriate for corporate bonds. The condo choice adds yet a whole new set of considerations. Any interest payments on a condo loan would be tax deductible to the extent the person itemizes. Manny would need a mortgage rate to calculate this. Plus, a condo offers the person a place to live. So, the person's current rent plays into the equation.

For part II, I gather Manny wants to compare 3 methods for calculating interest expenses on credit card debt. Again, no specific question is asked. In general, the formula is:
Interest = (B * r * d)/365
where B is some measure of balance
r is the APR rate of interest, 16%,
and d is the number of days (30)

Average daily balance ADB averages the daily balance over the period, Previous balance PB is simply the starting balance, and adjusted balance is the previous balance less payments or credits.

see
dmbfinance (period)com, tools-resources, articles-choosing-a-credit-card (period) asp


I STILL DON'T KNOW WHAT TO DO BUT I WILL CONTINUE TO SEARCH THE INTERNET. I WILL PROBABLY HAVE TO GIVE UP MY 4.0. MY TEACHER IS NOT A "GOOD TEACHER" SO TO SPEAK. THANKS FOR TRYING TO HELP, I APPRECIATE IT.


Nancy Tai has recently opened a revolving charge account with MasterCard. Her credit limit is $1000, but she has not charged that much since opening the account. Nancy hasn't had the time to review her monthly statements as promptly as she should, but over the upcoming weekend, she plans to catch up on her work


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a block of wood 3.0 cm on each side has a mass of 27g. what is the density of this block


Answer for Nancy Tai:

ANSWER:

Daily APR = APR / 365 or ((APR%/100) / 365)
Interest Paid = (Daily APR / 100) * Days is Billing Cycle * Balance

Adjusted Balance means only payments or credits are applied to balance, not purchases.
Therefore, Balance = starting balance - payments

Previous Balance means no payments or purchases applied.
Therefore, Balance = starting balance

Therefore, Adjusted Balance is the best way to go.
Daily Interest (for this problem) = $8.29
Adjusted Interest (for this problem)= $7.89
Previous Interest (for this problem)= $5.26

Hope this helps!



Answer for Nancy Tai:

ANSWER:

Daily APR = APR / 365 or ((APR%/100) / 365)
Interest Paid = (Daily APR / 100) * Days is Billing Cycle * Balance

Adjusted Balance means only payments or credits are applied to balance, not purchases.
Therefore, Balance = starting balance - payments

Previous Balance means no payments or purchases applied.
Therefore, Balance = starting balance

Therefore, Adjusted Balance is the best way to go.
Daily Interest (for this problem) = $8.29
Adjusted Interest (for this problem)= $7.89
Previous Interest (for this problem)= $5.26

Hope this helps!


A block of wood 3.0 cm on each side has a mass of 27g. what is the density of this block?

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what is a template?

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AHHHHHHHHHHHHHH HELP ME I'M SOO OOO CONFUSED!!

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