AMDM|Spring 2013 Budget Name: _________________________________ Per:__________

Unit 6: STATISTICS IN MY LIFE

Date Topic w Classwork Homework

Fri 5/3 Budget Preparation Collect Budget data (bring to class on Monday!)

Mon 5/6 Personal Budget Matrix

*MEET IN MEDIA CENTER TODAY! BRING YOUR FLASH DRIVE

Create a Budget for 1st

year of college (if living at home, assume that you are responsible for 10% of the household expenses).

REVIEW THE PROJECT ASSIGNMENT (counts as a test grade – due Mon 5/9)! Complete Budget Matrix in MS Excel at home if not finished in class

Tues 5/7

Personal Budget: Graphs & Analysis

*MEET IN MEDIA CENTER TODAY! BRING YOUR FLASH DRIVE

Create graphs to analyze personal budget income, savings and expenses. Work on Poster/ Presentations.

P.4-5: WS#1: Budget Analysis Part A (#1 – 15)

Wed 5/8 Personal Budget: Graphs & Analysis *MEET IN MEDIA CENTER TODAY! BRING YOUR FLASH DRIVE

Complete graphs & analysis. Complete Budget graphs and analysis for Presentation.

P.6-7: WS#1: Budget Analysis Part B (#16 – 21)

Thurs 5/9

Killer Debt! Credit Card Debt P. 9-10: WS#2: Credit Card (Part A)

P. 9-12: WS#2: Credit Card (Part B)

Finish any incomplete work in HW Packet

Fri 5/10 HOMEWORK PACKET DUE!!! (WS 1 & 2 in packet PLUS a print out of your own Excel Budget).

THIS COUNTS AS YOUR TEST GRADE!

Wrap-Up charts, graphs and analysis for tri-fold poster project

Mon 5/13

SIGN EXEMPTIONS

MEET IN MEDIA CENTER TODAY! BRING YOUR FLASH DRIVE

Wrap-Up charts, graphs and analysis for tri-fold poster project

Wrap-Up charts, graphs and analysis for tri-fold poster project

Tues 5/14 FINAL EXAMS 6th

& 7th

Presentations

Wed 5/16 Econ EOCT

Thurs 5/17 FINAL EXAMS 3, 4, 5th

Presentations

Fri 5/18 FINAL EXAMS 1st

& 2nd

Presentations

YOUR PROJECT PRESENTATION COUNTS AS YOUR FINAL EXAM GRADE!!!

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Presentations: Budget & Debt – THIS IS YOUR FINAL EXAM GRADE!!!

You will create a tri-fold poster to summarize your Budget and Debt (& Savings – optional). You should use the charts and graphs that you created in your Excel spreadsheet as part of the class and homework exercises. You will be graded on the content and accuracy of the charts and graphs in your poster as well as its visual appeal. You are not limited to the charts and graphs that we created in class, but you should include those that we worked on at a minimum. (As an additional bonus, you may also complete the Savings worksheets in the packet and include those on your poster presentation for an additional 10 points for each!).

Your tri-fold poster should be divided into 3 sections and contain appropriate content for each section:

1) My Budget o My Budget o Pie Chart: Income, Savings & Expenses o Pie Chart: Fixed vs Discretionary Expenses o Bar Chart: Savings vs. Expenses o Pareto Chart: Expenses

2) My Debt o Table: Summary of Debt o Pie Chart, Bar Graph or Pareto Chart comparing your debt

3) My Savings (BONUS – OPTIONAL) o Table: Savings Projections o Line Graph showing each scenario (see Day 6 instructions).

Your poster should focus on your first year of college, so give it a college theme. You may want to decorate it with the colors for your college and themes or activities that you plan to participate in next year. Decorate your poster so that it is colorful and visually appealing.

Posters are due at the beginning of class on your Final Exam Day. If you will not be in class this day, please plan to make arrangements to drop your completed project off prior to class on that day. Late projects will not be accepted! The HOMEWORK PACKET counts as a TEST GRADE. The PRESENTATION counts as your FINAL EXAM GRADE! You should be prepared to share your tri-fold poster with the class on your scheduled Final Exam day.

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Name: ________________________________ Statistics are all around us. Using Statistical Methods is very helpful in managing a business and your personal finances.

In this exercise, you will:

1) Create a Personal Budget for the 1st year of College. 2) Use Statistics to summarize your projected Income, Savings and Expenses and

to analyze your budget.

A budget template has been created for you. You may add and delete budget categories based on your personal estimated expenses. If you do not know a good estimate for the category, you can do some research to find out about average costs for that item where you will be living (e.g., cable providers in Athens, Georgia). Remember to SAVE YOUR FILE FREQUENTLY!

For purposes of this activity, if you plan to live at home or if your parents or the Good Fairy of the East plans to pay all of your expenses, assume that you pay 10% of your parents’ household expenses as your cost to live at home. Consider anything your parents pay as “Income” to you).

Day 1: Create Your Personal Budget Model

I. Create A Budget Model 1. Download the Budget Template from the class blog – this contains budget categories

for Income, Savings and Expenses (Income is money in, Expense is money out). 2. Review the budget categories – these are the types of income or expenses that most

people have each year. 3. Add or delete budget categories as needed (note: for every category you delete, you

must provide explanation why you deleted the category). II. Determine & Enter Monthly Budget Amounts

1. For each budget category, you will enter the estimated monthly amount in the light blue column.

2. Research missing information – for any budget items that you are not sure of the cost, do some research! For example, if you are attending UGA, look up the available cable packages by the local cable provider in Athens, GA and determine a good estimate for your monthly cable bill. In the “Comments/Reference” column, write down the name of the company or the website that you used to get your data.

3. Fill in the monthly amount of the income or expense item in the blue “Monthly Amount” column on the Budget spreadsheet. Only enter data in this column!

4. If the amount is an Annual amount, you will need to calculate the average monthly amount.

5. Classify the timing of the income or expense as M (monthly), Q (quarterly), SA (semi-annually) and A (annually).

6. The spreadsheet will calculate the Annual Budget Amounts for you.

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III. Verify Your Budget Totals 1. The “Total” columns in the spreadsheet show the sum of the individual budget items

in each category. Verify that the category totals are correct (and that the ‘=Sum’ formula is accurately pulling in all rows that you need).

2. Verify that the summary totals are correct (Total Income, Total Expenses, Cash Flow)

IV. Evaluate and Adjust 1. Calculate your monthly and annual cash flow:

(ash Flow = Total Income – Total Savings - Total Expenses) 2. Evaluate the cash flow. The Cash Flow at the bottom should equal zero

when you have a balanced budget.

Is the cash flow positive? Good! Add the amount of the Cash Flow to your Savings. This should make the Cash Flow = 0. Now, go to Day 2.

Is the cash flow negative? Back to the drawing board! You need to go back and adjust your budget (either more money or less expenses – money doesn’t grow on trees, you know). You cannot proceed with the charts and graphs until your Cash Flow = 0!

Day 2-3: Use Statistics to Analyze Your Personal Budget. For all graphs: Include a legend and clearly label your graph. For Pie Charts, show the percent values on each piece of the pie. You will need to include these charts on your final project!

I. Create a Summary of Your Budget Data (this makes it easier to create your graphs in MS Excel). 1. Copy your budget data from the “My Budget” tab. 2. Click on the “Summary Budget Data” tab. (This should be blank). 3. Place your cursor in the upper left corner. 4. From the Menu Bar, Select “Edit”, “Paste Special.” Select “Values Only.” 5. This will copy the categories and amounts to your Summary Budget Data tab without

the calculations. 6. Delete the detail items so that only the Summary Categories and Bold Categories

with their appropriate totals are displayed. II. Create Charts in MS Excel to Graphically Summarize Your Data:

1. Create a Pie Chart showing Income, Expenses, and Savings. 2. Create a Pie Chart showing Fixed vs/ Discretionary Expenses. 3. Create a Bar Graph for the Total Expense and Total Savings budget categories (show

a different bar for each bold category). 4. Create a Pareto Chart for the Expense Categories (show a different bar for each bold

category). II. Use your Budget Data and Graphs to Complete the WS #1: Budget Analysis

Worksheet.

*** SAVE YOUR FILE TO YOUR STUDENT ID ON THE H DRIVE USING

THE FILE NAME: yourname_Budget Spreadsheet.xls

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Name: ________________________________ WS#1: BUDGET ANALYSIS WORKSHEET Using the data from YOUR Budget Worksheet, complete the following table.

Budget Category Amount Percentage of Total

1). Total Monthly Income $

2). Total Monthly Savings $

3). Fixed Expenses $

4). Discretionary Expenses $

5). Monthly Cash Flow $

6) When you completed your Budget the first time, did you have a Zero Cash Flow amount?__________

7) What items in your budget did you adjust so that you were able to have a Zero Cash Flow amount?

8) On what category do you plan to spend the most money? ____________

Does that make sense? Is that appropriate? Why?

9) What is a “Discretionary Expense”?

10) Why is it important to have a Zero Cash Flow?

11) Calculate the ratio of Savings to Income. Savings

Income=______________

12) Calculate the ratio of Expenses to Income. Expenses

Income

Expenses

Income=_______________

13) Compare the two ratios. Which is larger? _____________________.

What does that mean in words?

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Use the table below for #14-15.

Item July Aug Sept Oct Nov Dec Avg.

Groceries $740 $800 $650 $820 $820 $880

Dining Out

$120 $150 $300 $80 $100 $150

Fuel (car) $200 $240 $320 $300 $280 $220

Cell Phone

$104 $108 $126 $140 $120 $140

Electricity $140 $160 $120 $90 $140 $160

Water $52 $58 $62 $48 $48 $62

14) The Bradley’s want to use the average of six months as their budget starting point in each category. Calculate each monthly average and enter it in the table above.

15) List the expenses from the table above that are

Discretionary Expenses Fixed Expenses

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Use the table below for #16-20.

Ms. April’s budget is shown in the table below. Use Ms. April’s financial data to answer the following questions.

Budget Item Monthly Amount Cateogry Total Percentage

Income

- Teacher $5,000

- Tutoring $1,200

Expenses

- Rent $2,200

- Car Payment $ 180

- Electricity $ 80

- Garbage Pickup $50

- Cable TV $40

- Dining Out $ 200

- Water $ 40

- Renters Insurance $ 30

- Loan Payment $ 200

- Groceries $ 600

- Personal Loan $ 100

- Land Phone $ 60

- Auto Insurance $ 70

- College Loan $ 250

- Cell Phone $ 80

- Medical Insurance $ 60

- Entertainment $ 250

Savings

- Savings Account $200

- Emergency Fund $200

Monthly Cash Flow

16) The Consumer Credit Counseling Service suggests that the monthly food budget be between 15-30% of income.

a) What is Ms. April’s total monthly food bill including dining out?

b) What percent of her income is spent on food?

c) Is Ms. April in, below, or above the recommended interval?

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17) In addition to the monthly expenses that Ms. April has calculated, she also knows that she must pay taxes of $3,000 per year in April and an additional Tuition payment of $5,000 in August.

a) How should Ms. April adjust her budget to prepare for these expenses?

b) How much should Ms. April set aside each month to cover these expenses?

c) Adjust Ms. April’s monthly budget to include line items for Taxes & Tuition.

18) Including planning for Taxes & Tuition, calculate the percentage allocated to each budget item and write the percentage amounts in the table.

19) Create a Pie Chart (circle graph) showing the allocation of each Summary Budget Category (Income, Savings and Expenses). Don’t forget appropriate labels and a legend!

20) Calculate Ms. April’s Cash Flow. Based on this value, how would you advise Ms. April to adjust her budget?

Use the following situation and table below for # 20 – 21.

Jessica pays health, car, home and life insurance over the course of a year. The chart below indicates her monthly insurance budget expenses.

20) Create a bar graph to chart these expenses.

21) Draw a line graph showing her average monthly expenses. Remember to include appropriate labels.

Jan Feb Mar Apr May Jun July Aug Sept Oct Nov Dec

$0 $250 $200 $300 $200 $600 $200 $300 $300 $0 $200 $600

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Day 4: Killer Debt – Credit Cards

I. Complete the WS#2: Credit Card Worksheet Activity using the credit card calculator at www.creditcards.org/calculators .

II. Analyze your personal debt.

1. Do you have any Debt? 2. List your debt in the table provided on the Debt Analysis tab on your Budget

Spreadsheet. Be sure to include any credit card balances and car loans! I. Create a Pie Chart, Pareto Chart or Bar Graph to compare the types and

amount of debt that you have. II. Include the table Sumarizing your Debt and your graph in your Debt section

of your tri-fold poster.

VOCABULARY:

Annual Percentage Rate (APR)

Balance

Credit

Down Payment / Money Down

Finance Charge

Installment

Interest

Monthly Payment

Retail Price

Sale Price

Total Cost

Total Months to Pay

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Name: ________________________________ WS#2: CREDIT CARD WORKSHEET (Part A) “He that goes a borrowing goes a sorrowing.” Benjamin Franklin Best Buy is having a mega sale on plasma tvs for 25% off the retail price! Nathan can’t wait to hang a 52” tv in the commons of his new fraternity house. Nathan buys a new Sony 52” tv for $1,500 – a great deal, because it usually costs $2000!

1) How much money does Nathan “save” by purchasing the tv for $1,500 instead of paying the full retail price if he pays cash today for the tv?

________________

Best Buy is offering a great promotion to finance the tv with only 10% cash down up front. He can finance the balance subject to only 2.5% monthly interest rate.

2) How much cash does Nathan pay up front? _____________________

3) What is the annual interest rate? _____________________

4) Nathan determines that he is able to pay $40 per month.

a) How long will it take him to pay off the balance? Give your answer in years.

________________

b) How much total interest will Nathan pay?

________________

5) When the credit card bill arrives and specifies that the minimum payment due is only $34. If Nathan pays the minimum amount of $34 per month,

a) How long will it take him to pay off the balance? Give your answer in years.

________________

b) How much total interest will Nathan pay?

________________

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6) Charlie paid attention in class when they learned about credit card debt. He advises Nathan to pay at least $100 per month, regardless of what the minimum balance says on the credit card statement.

a) If Nathan follows Charlie’s advice, how long will it take him to pay off the balance? Give your answer in years.

________________

b) How much interest will Nathan pay?

________________

Complete the table below to compare the different options.

7) Calculate the total “out of pocket” cost for each scenario and the total “Savings” Nathan will have by purchasing the tv at the big sale.

Cash $40/Month Option

Minimum Payment Option

$100/Month Option

Cost of TV $1,500 $1,500 $1,500 $1,500

Money Down ”Up Front”

$1,500

Monthly Payment

Months to Pay

Total Payments

Total Cost of TV $1,500

Total Interest Paid

Total “Savings” $500

8) If Nathan planned ahead and saved $100 a month his budget to buy the tv, how many months would he have to save before he could make the purchase?

______________________

9) Which Payment Option should Nathan use? Why?

10) Over the course of three years, Nathan makes 3 late payments. Each late payment results in a $25 fee. If Nathan pays $40 per month, how long will it take him to pay off the credit card balance including these fees? How much total will he pay?

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CREDIT CARD WORKSHEET (Part B)

Some stores offer creditworthy customers the convenience of paying for merchandise or services over a period of time. This is an installment plan. The customer pays part of the selling price at the time of purchase. This is the down payment (also referred to as money down). The scheduled payments, or installments, are usually made on a monthly basis. Installment buyers are charged a fee. This fee is the interest, or finance charge, and is added to the cost.

Solve each problem. Round monetary numbers to the nearest cent.

1) Heather wants to purchase an electric guitar. The price of the guitar with tax is $2,240. If she can save $90 per month, how long will it take her to save up for the guitar?

__________________

2) Heather speaks to the salesperson at the music store who suggests that she buy the guitar on the installment plan. It requires a 15% down payment. The remainder, plus an additional finance charge, is paid back on a monthly basis for the next 2 years. The monthly payment is $88.75.

a) What is the down payment? _________________

b) What is the monthly payment? _________________

c) How many months will she finance the guitar? _________________

d) Calculate the sum of the monthly payments. _________________

e) Calculate Heather’s total out of pocket cost. _________________

f) Calculate the finance charge (fee) that Heather pays. _________________

g) Write an equation to calculate the finance charge. Use “p” fror the price of the guitar, and “m” for the monthly payment. __________________

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3) Max created a spreadsheet for credit (installment) purchase calculations.

Complete the Following Table.

Purchase Price

(P)

Down Payment (% as a decimal)

(d)

Down Payment ($)

(DP)

Monthly Payment

(MP)

Time in Years

(Y)

Time in Months

(M)

Total of Monthly Payments

(n)

Finance Charge

(FC)

$1,200 0.20 $97.01 1

$1.750 0.10 $71.12 2

$1,340 0.15 $77.23 1.5

$ 980 0.10 $165.51 0.5

a) Write an equation to compute the down payment. DP= ________________

b) Write an equation to compute the time in months. M = ________________

c) Write an equation to compute the total monthly payments. n = ________________

d) Write an equation to calculate the total finance charge. FC = ________________

e) Use your equations in a – d to fill in the missing entries in the table.

4) Monique buys a $4,700 stereo system that requires 15% down. How much is the down payment?

____________________

5) Craig wants to purchase a boat that costs $1,420. He signs an installment agreement requiring a 20% down payment. He currently has $250 saved. Does he have enough for the down payment?

____________________ 6) Ben bought a jet ski for $1,980 on a credit card. He paid 10% down and will make 18 monthly

payments of $116 each. a) How much is the down payment? ___________________

b) What is the total amount of monthly payments? ___________________

c) How much did Ben pay for the jet ski? ___________________

d) What is the finance charge? ___________________

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BONUS WORKSHEET: Student Loan Debt – Good Debt?

I. Watch the videos on Student Debt (we will not have time to watch these in class, however you can access the videos using the links below or on the blog).

II. Complete the WS#3: College Costs. 1. You will need access to the Internet for this Activity. Log on to

www.collegeboard.org OR use the links from the class blog. 2. Follow the directions in WS #3. 3. When you finish WS #3, proceed to Step III.

III. Add the amount in the “Total Paid in Loans” from the College Costs Worksheet to your table on the Debt Analysis tab.

IV. Create a Pie Chart, Pareto Chart or Bar Graph to compare the types and amount of debt that you have.

VOCABULARY

LIBOR Rate: Note: The current LIBOR rate is 0.75.

LIBOR stands for London Interbank Offered Rate. It's the rate of interest at which banks offer to lend money to one another in the wholesale money markets in London. It is a standard financial index used in U.S. capital markets and can be found in the Wall Street Journal. In general, its changes have been smaller than changes in the prime rate.

It's an index that is used to set the cost of various variable-rate loans. Lenders use such an index, which varies, to adjust interest rates as economic conditions change. They then add a certain number of percentage points called a margin, which doesn't vary, to the index to establish the interest rate you must pay. When this index goes up, interest rates on any loans tied to it also go up. Although it is increasingly used for consumer loans, it has traditionally been a reference figure for corporate financial transactions.

Look it up at www.bankrate.com

Grant

Loan Terms

Monthly Payment

Room & Board

Scholarship

Stafford Loan

Student Loan

Total Cost of Loan

Tuition

Videos: How to Attend College without Accruing Lots of Debt: http://www.cnn.com/video/?/video/business/2011/01/24/ybl.investing.in.you.cnn (3 minutes)

Student Load Debt Surpasses Credit Card Debt – But Still A Good Investment (Good Debt) http://www.imdb.com/video/cbs/vi3888684313/ Tips on Managing Student Loan Debt & Costs of Delinquency http://www.cbsnews.com/video/watch/?id=7363099n

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Name: ________________________________ BONUS: WS#3: COLLEGE COSTS WORKSHEET (Part A) ““If you think education is expensive, try ignorance!” -- Andy McIntyre “A man who has never gone to school may steal from a freight car; but if he has a university education, he may steal the whole railroad.” -- Theodore Roosevelt

College costs are on the Rise. The cost to attend a four year college seems daunting. But is it worth it? Using the data from The College Board (www.collegeboard.org) and the calculators provided on their website, you will decide for yourself.

Go to www.collegeboard.org .

1) Select “College Planning” from the Menu Bar. 2) Then select “Pay for College” (the green Menu Bar item). 3) Select “Calculators” under “Tools” in the Left Column of the screen. 4) If you have an account, you may log in and use costs that are specific to the colleges in your

list. The information you type will be saved so that you can access it later. If you do not have an account, you can create one (free) or you can use the calculator as a guest (but you will not be able to save the information for later use).

5) Select “College Cost Calculator”.

Calculate the estimated costs for you to attend college.

1) Select your college (or use the closest estimate, e.g., 4 – year public in-state college). 2) Enter 5% for estimated inflation rate. 3) Enter the amount you plan to pay from savings – if you are not sure, use 35%. 4) Enter the number of years until college (for most of you, that’s 1). 5) Complete the table below based on the information you entered.

Avg. Tuition Amount $

School or Type of College Specified

Estimated Total Cost $

Estimated Savings Goal $

Scholarships or Grants $

Difference

(this is the amount you will either finance or make up with other scholarships and grants)

$

Compare Student Loan Options

1) Select “Compare Loans” in the Left Column of the screen. 2) Stafford Loan – Subsidized: This loan has the best terms of all student loans and is based

on financial aid. For this exercise, assume that you qualify for financial aid. The maximum amount you can finance using a Stafford Loan is $5,500. Enter this amount here.

3) Stafford Loan – Unsubsidized: This loan has favorable terms as well, however is not as limited to financial need. You may enter up to $2,200 to finance with this loan.

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4) Calculate the remaining amount to finance using the “Difference” column above (and subtract the amount financed with the Stafford Subsidized and Unsubsidized Loans). This is the amount that you will finance with either a Federal PLUS Student Loan or another private student loan.

5) Find two other Student Loan to use as a comparison. SallieMae offers Student Loans and is one option – go to www.salliemae.com/student-loans for more information. Using the Smart Option Student Loan, click on “Rates & Terms”. This loan uses a variable rate called the LIBOR rate. The best terms are LIBOR + 2.5% and the worst terms are LIBOR + 10.5%.

6) Look up today’s LIBOR rate at www.bankrate.com and calculate the lowest rate terms and the highest rate terms for the SallieMae loan:

TODAY’S LIBOR RATE: 0.76

Lowest Terms: _______________Highest Terms: ________________

(LIBOR + 2.5%) (LIBOR + 10.5%)

7) In the Alternative Loan Section, enter the same amount to finance from #4 above. Using the two rate terms and the remaining amount to finance in the Loan Comparison Calculator. The term should be 10 years.

8) Make sure all boxes are “checked” – then select “Compare” to compare the 5 options.

Complete the Following Table with your Loan Comparison Data:

Loan Name:

Borrow Amt.:

Interest Rate:

Fees:

Term: 10 yrs 10 yrs 10 yrs 10 yrs 10 yrs

Estimated APR:

Total Fees:

Total Interest Paid:

Total Borrowed:

Monthly Pmt (per $1000)

Total Cost per $1000

Monthly Payment

Total Amount of Repayment

Calculate the Total Paid in Loans

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Using the table above, calculate the Total Paid in Loans by adding the combination of loans you expect to use (for this exercise, assume that you will use columns 1 & 2 and then select one of the options in columns 3, 4 OR 5). Be sure that you don’t double count the loans!

Total Paid in Loans = ______________ + _________________ + _____________

Total Paid in Loans = ____________________

Calculate the Total Cost to Attend College

Using the amount to finance and the total amount of repayment from the table above, calculate your estimated total cost to attend college.

Avg. Tuition Amount $

School or Type of College Specified

Estimated Total Cost $

Estimated Savings Applied to College $

Scholarships or Grants (subtract) $

Total Paid in Loans

(this is the amount calculated above)

$

Total Cost to Attend College

(Total Savings + Total Paid in Loans – Scholarships/Grants)

$

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IS THE COST OF COLLEGE WORTH IT? (PART B)

The following chart (Figure 1.1) contains data from the College Board Research showing the Median Income of workers ages 25 and older based on Education Level in 2008.

1) Create a bar graph to compare the Median Income earned based on Level of Education. Use the “After-Tax Earnings” Column. Be sure to include appropriate Titles and Labels.

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2) Figure 1.3 shows estimated Cumulative Earnings (after loan repayment) for High School Graduates, 2- Year College Graduates (Associates) and 4-year College Graduates (Bachelors). Using this data , complete the table below.

Age: 20 25 30 35 40 45 50

Estimated Income (HS)

Estimated Income (Associate)

Estimated Income (Bachelor)

3) Create a Triple Line Graph to compare the Projected Income based on Education Level. Be sure to include appropriate labels and titles.

4) Plot the Total Cost of College on your Line Graph above. Using the graph above, when can you expect to “Break Even” (when will your income exceed your student loan payments and cost of college)?

5) Many people say that Student Loans are “Good Debt”. Do you agree? Is the cost of college worth it? Why?

6) Looking at the average data for a Master’s Degree or Doctoral Degree, would you consider education beyond college? Why?

7) Research starting salaries in the field in which you plan to major in college. Is your planned occupation at, above, or below the reported average in Figure 1.1? Plot this amount on the Double Line Graph above.

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BONUS: SAVINGS - Pay Yourself First!

I. The Budget Model includes a category for Savings BEFORE listing all Expenses. This is because you should always save some amount of money for emergencies, as well as put some aside for, yes, retirement. Although a very long way off for you now, the power of compounding interest makes it worth the while to put money aside every month NOW so that it can start to grow on its own later. (See example table on the following page).

III. Evaluate the Power of Money Using a Table. 1. Open your Budget Spreadsheet. 2. Click on the “Savings Analysis” tab. 3. Review the table that shows the Amount Saved, Interest Rate, and Value at 1, 5, 10,

15 and 20 years from now. 4. On Line #1, Locate the bold box in the light blue column under “Monthly Savings.”

Enter the Monthly Savings amount from your Total Savings in the “My Budget” tab. Calculate the total saved.

5. On Line #2, Increase your monthly savings amount by $100. Calculate the total saved.

6. On Line #3, assume you receive $5000 for Graduation. Deposit the $5000 into your Savings account and continue to save the same amount as in #1 above. Calculate the total saved.

7. On Line #4, assume you receive $5000 for Graduation and invest it. Then do not save any more each month. Calculate the total saved.

8. On Line #5, using the “Total Cash Invested After 20 Years” from Line #1, enter this amount as a Lump Sum. Then do not save any more money each month. Calculate the total saved.

9. On Lines #6, 7 & 8, create your own savings scenario. II. Evaluate the Power of Money Using Line Graphs. Note: You may use MS

Excel to create the graphs or you may create them by hand. 1. Using the calculations in your Table, create a Line Graph for EACH of the scenarios.

Use a different color for each scenario (line). Don’t forget to include a Title and Legend! You should graph all of your scenarios on one graph using the same x & y axes.

2. Show the Value at 1, 5, 10, 15 and 20 years from now for each of the savings options. III. Print the Savings Table and the Line Graphs in your tri-fold project under

the Savings section. IV. Analyze your data:

1. Which option has the greatest value after 5 years? 2. Which option has the greatest value after 10 years?

3. Which option has the greatest value after 20 years?

4. Which option would you choose? Why?

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YOUR FINAL EXAM: PUTTING IT ALL TOGETHER!

Presentations: Budget, Savings & Debt

You will create a tri-fold poster to summarize your Budget and Debt (and it is an option to also include Savings). You should use the charts and graphs that you created in your Excel spreadsheet as part of the class and homework exercises. You will be graded on the content and accuracy of the charts and graphs in your poster as well as its visual appeal. You are not limited to the charts and graphs that we created in class, but you should include those that we worked on at a minimum.

Your tri-fold poster should be divided into 2 sections (3 if you include Savings) and should contain appropriate content for each section:

4) My Budget o My Budget o Pie Chart: Income, Savings & Expenses o Pie Chart: Fixed vs Discretionary Expenses o Bar Chart: Savings vs. Expenses o Pareto Chart: Expenses

5) My Debt o Table: Summary of Debt o Pie Chart, Bar Graph or Pareto Chart comparing your debt

6) My Savings (OPTIONAL) o Table: Savings Projections o Line Graph showing each scenario (see Day 6 instructions).

Your poster should focus on your first year of college, so give it a college theme. You may want to decorate it with the colors for your college and themes or activities that you plan to participate in next year. Decorate your poster so that it is colorful and visually appealing.

You will be graded using the following matrix:

Not Evident

(0)

Somewhat Evident

(10)

Clearly Displayed/ Included

(20)

Total

College Theme

Colorful and Visually Appealing

Budget Content

Debt Content

Project Grade:

BONUS: Savings Content

TOTAL GRADE:

If you choose to do the Optional Savings section, you may earn up to 10 bonus points on both your Final Exam grade (must be completed in the HW packet & presentation).