1. Prepare your personal statement. (3 pts Total) Tell me about yourself. Who are you, where you come from, what are your values, what′s important to you, what drives you, what are your priorities, what is your major, and why did you choose the major you chose as a profession? Also: a) Do you think you would ever like to visit a country you have never experienced? If so, why and where would you go? Do you have a desire to go International and obtain gainful employment? If so, why, where, and what company would you like to hire you? Would you study/research the culture of the International country you would like to work and/or visit before you go? Why? b) Where do you see yourself in 5 years (setting goals)? How are you going to get there (planning process and implementing your plan)? What is at stake if you don’t get there (there is always something at stake)? What is your alternative plan (everyone should have a plan B)? c) Where do you see yourself in 7 years (setting goals)? How are going to get there (planning process and implementing your plan)? What is at stake if you don’t get there (there is always something at stake)? What is your alternative plan (everyone should have a plan B)? d) Discuss your goals for Retirement and Savings planning process** 2. Prepare your personal Income Statement and Balance Sheet. (25 pts. Total) a) Prepare a balance sheet for yourself as of February 1st, 2022. (10 pts) b) Prepare an income statement for the month ending February 28th, 2022. (5 pts) c) Using your financial statements calculate the following ratios: (5 pts) 1) Current ratio 2) Month′s living expenses covered ratio (Emergency fund ratio) 3) Debt ratio 4) Inverse debt coverage ratio (refer to your textbook) 5) Savings ratio d) Tell me what you think (interpret) about EACH of your ratios and what can you do to improve it. (5 pts) 3. Monthly budget updated with actual numbers from the month of February, 2022. Make sure the budget has three columns (Budgeted, Actual, and Variance). (3 pts Total) a. Take the budget you prepared earlier for your homework and fill in the ″Actual″ column for income and expenses for the month and then calculate your variances. (1 pts) b. Explain how you would reconcile the budget variance. In other words, what would you do with the difference between what you thought you were going to spend versus what you actually spent. Would you change any of your behavior, habits or lifestyle in the future to stay within your budget? (2 pts) 4. Credit report. (2 pts Total) a. Consult your book and write a detailed paragraph about what you would do if you were a victim of Identity Theft. What steps would you take to resolve the issue? b. Consult your book and write a detailed paragraph about how you would resolve a billing error on a report. What steps would you take to resolve the issue? 5. The credit card habit quiz. (2 pts Total) Take the “Credit card quiz” that is listed in your book (p. 192) and write a paragraph on ″what to do if you had a problem with your credit card spending habit.″ If you use a debit card instead of a credit card then treat your debit card as a credit card and answer the questions in the quiz and write the above paragraph. If you don′t use either debit or credit card then answer the questions based on how you think you would govern yourself if you had a credit card. 6. The car you can afford. (6 pts Total) Use the calculator https://www.moneyunder30.com/car-affordability-calculator (Links to an external site.) to decide how expensive of a car you can afford given the monthly and down payment you can make (scroll towards the bottom to “More Calculators” and click on Auto loan calculator (input 5% sales tax and $500 for Dealer/Title/Registration Fees). Use the monthly income that you would be earning as a college graduate with your major (go to https://www.indeed.com (Links to an external site.) (at the top – click on find salaries) to determine your monthly starting salary. Input your information, then Submit the loan information and the results. Observe what is happening from year to year. Write a brief summary explaining your observations if you finance an automobile at 5% for each year listed below: 3 points) a) Three years b) Four years c) Five years a) Based on the results you received for a three-year loan, using the internet, find a car that match your results (budget) and explain (in a paragraph) why you selected that particular vehicle. Remember to use your lecture notes and textbook knowledge with answering the questions. (3 points) 7. The house you can afford. (6 pts Total) Use website http://www.bankrate.com/calculators/mortgages/new-house-calculator.aspx to calculate how big of a house you would be able to afford based on your annual earnings when you graduate (use your same monthly salary from the car assignment). Enter the annual amounts $1,500 for property tax, $1,500 for home insurance, and $15,000 for down payment. (Remember to input your monthly car payment and input zero’s in the fields that do not apply to you; example: if you do not receive Alimony input zero). a) Calculate the numbers you get for a 5%, 15-year mortgage. b) Calculate the numbers you get for a 7%, 30-year mortgage. * a) If you have five years to save $15,000 for down payment for your future house, what specific saving steps could you take to save the amount? Please consult your textbook and lecture notes. 2) Calculate how much you would have to save each month for five years to meet your down payment goal of $15,000, assuming your bank offers you 1.50% APR on deposits. [Hint: use excel to solve it and/or http://bankrate.com (Links to an external site.) – savings calculator] Submit your information and results. 8) Investment profile. (3 pts Total) If you are going to get into investing, you need to know how much risk that you can personally tolerate. a) Take the quiz at the following on page 383 in your book about risk tolerance: Include a copy of the quiz answers. b) Write a paragraph about the results you got from taking the quiz. Explain your risk tolerance for investing. c) After reading the article in the following link: http://www.bankrate.com/finance/investing/saving-money-or-investing-more-important-over-time.aspx (Links to an external site.) and knowing what you know now about yourself, share your plan about investing in paragraph format? (i.e., when would you start, how would you find the money to invest, what would you invest in, etc.)
