Financial Analysis Homework Help
Budget: $10 – $30 USD
• Show all work for credit. A good rule of thumb is that if you type it in your calculator, you should write
it on your paper!
• If rounding is necessary and no directions are provided, you choose how to round.
• Include appropriate labels with results from all calculations ($, dollars/person, etc).
• If you use an Excel finance calculator, specify the calculator by name and label all inputs.
Part 1: Saving for Retirement
1. Devon is young and has just graduated college with her associate’s degree. She plans to start saving money
for retirement as soon as she starts her new job. By taking 10% of her monthly gross income, Devon is able
to contribute (a) $972 each month to a retirement plan. The account is expected to earn interest with an
APR of 6.25% compounded monthly. Round answers to two decimal places.
a. How much money will be in Devon’s retirement account if she continues to make the same monthly
investment for 40 years? (3 pt)
b. Overall, Devon contributed how much of her own money into the retirement account? (4 pt)
c. What percent of the final balance in Devon’s retirement account was interest?
Later in life, Devon convinces her friend Taylor to start saving for retirement as well. Even though Taylor is
the same age as Devon, she hasn’t started saving for retirement yet. With only 20 years left until they both
plan to retire, Taylor decides she needs to invest at least twice as much as Devon each month to try to catch
up to Devon’s retirement plan. Taylor opens a similar retirement account to Devon’s that also has an APR
6.25% compounded monthly. She will invest (b) $2,173 per month. Round answers to two decimal places.
a. How much money will be in Taylor’s retirement account if she continues to make the same monthly
investment for 20 years? (3 pt)
b. By the time she retires, Taylor will have contributed how much of her own money overall? (4 pt)
c. What percent of the final balance in Taylor’s retirement account will be interest? (4 pt)
3. Write complete sentences that identify which person had the higher amount and by how much. Round
answers to two decimal places.
a. Who had more money in their retirement account when they planned to retire? How much more? (4 pt)
b. Who contributed more to their retirement account? How much more? (4 pt
Andre wants to buy a new car in a few years. He sets a goal to have (c) $42,629 in his savings account in
order to buy a new car. Andre plans to save money for 5 years by making monthly deposits to a savings
account that has an APR of 2.75% compounded monthly. Round answers to two decimal places.
a. In order for Andre to reach his savings goal, how much will Andre need to save each month? (3 pt)
b. Overall, Andre contributed how much of his own money into the savings account? (4 pt)
5. Walter is Andre’s friend and is impressed by the new car. As such Walter thinks it’s a good time for a new car
as well. Since Walter has not been saving money, he plans to take out a loan to pay for the car. He is able to
finance (c) $42,629 with a 5-year loan. The loan has an APR of 6.15% compounded monthly. Round answers
to two decimal places.
a. What is the minimum payment amount Walter will need to make for his car loan? (3 pt)
b. How much will Walter pay altogether over the life of his car loan? (4 pt)
6. Both men purchased a (c) $42,629 car. Who spent more of their own money for the car and by how much?
Round to two decimal places.
Morgan recently graduated college with their degree and owes (d) $22,208 in student loans with an APR
of 5.8% compounded monthly. They are expected to pay off the loan in 15 years. Round answers to two
decimal places.
a. Under the current terms of their loan, what is Morgan’s minimum monthly payment? (3 pt)
b. What is the total amount Morgan will pay when the loan is complete? (4 pt)
c. How much will Morgan pay in interest? (4 pt)
8. Morgan decides to pay more than the required minimum monthly amount for their loan to pay off the loan
faster. They want to have the loan paid in full after 10 years. Round answers to two decimal places.
a. Assuming all the same conditions of the original student loan, what would Morgan’s new monthly
payment need to be if they wanted to pay off the loan in 10 years? (3 pt)
b. What is the total amount Morgan will pay if they pay off the loan in 10 years? (4 pt)
c. With the 10-year loan, how much will Morgan pay in interest?
Compare the 15-year loan to the plan to pay off the loan in 10 years instead. Answer in complete sentences.
a. Which plan will allow Morgan to pay less per month? How much less? (3 pt)
b. Which plan will allow Morgan to pay less overall? How much less? (3 pt)
Part 4: Mortgages
10. The Yang family plans to buy a new house soon and is considering mortgage options. They are considering
two options, a 15-year mortgage with an APR of 6.3% or a 30-year mortgage with an APR of 7.8%. Both options
compound interest monthly. Currently the Yang family spends (e) $2,530 each month in rent and plan to
spend the same amount on a mortgage payment. They do not currently have a down payment and will finance
the full price of the home. Round answers to whole numbers.
a. If the Yang family chooses the 15-year mortgage, how much will they be able to borrow? (3 pt)
b. If the Yang family chooses the 30-year mortgage, how much will they be able to borrow? (3 pt)
c. Which option will allow the Yang family to borrow the most? By how much? Respond in a complete
sentence. (3 pt)
d. Under which option will the Yang family spend the most overall? By how much? Respond in a complete
sentence.
In parts 1 through 4 of this project, two different financial options are presented. For each part, choose which
option is better and explain why. Complete sentences should be used in each answer and the explanation
should include at least one result from your previous calculations. (4 x 3 pt = 12 pt)
Part 1: Saving for Retirement Options: Start saving for retirement early or wait to save for retirement
Part 2: Buying a Car Options: Save money to buy a car or use a loan to pay for a car
Part 3: Student Loans Options: Pay a loan off over a longer amount of time or shorter amount of time
Part 4: Mortgages Options: Buy a house with a 15-year mortgage or a 30-year mortgage
it on your paper!
• If rounding is necessary and no directions are provided, you choose how to round.
• Include appropriate labels with results from all calculations ($, dollars/person, etc).
• If you use an Excel finance calculator, specify the calculator by name and label all inputs.
Part 1: Saving for Retirement
1. Devon is young and has just graduated college with her associate’s degree. She plans to start saving money
for retirement as soon as she starts her new job. By taking 10% of her monthly gross income, Devon is able
to contribute (a) $972 each month to a retirement plan. The account is expected to earn interest with an
APR of 6.25% compounded monthly. Round answers to two decimal places.
a. How much money will be in Devon’s retirement account if she continues to make the same monthly
investment for 40 years? (3 pt)
b. Overall, Devon contributed how much of her own money into the retirement account? (4 pt)
c. What percent of the final balance in Devon’s retirement account was interest?
Later in life, Devon convinces her friend Taylor to start saving for retirement as well. Even though Taylor is
the same age as Devon, she hasn’t started saving for retirement yet. With only 20 years left until they both
plan to retire, Taylor decides she needs to invest at least twice as much as Devon each month to try to catch
up to Devon’s retirement plan. Taylor opens a similar retirement account to Devon’s that also has an APR
6.25% compounded monthly. She will invest (b) $2,173 per month. Round answers to two decimal places.
a. How much money will be in Taylor’s retirement account if she continues to make the same monthly
investment for 20 years? (3 pt)
b. By the time she retires, Taylor will have contributed how much of her own money overall? (4 pt)
c. What percent of the final balance in Taylor’s retirement account will be interest? (4 pt)
3. Write complete sentences that identify which person had the higher amount and by how much. Round
answers to two decimal places.
a. Who had more money in their retirement account when they planned to retire? How much more? (4 pt)
b. Who contributed more to their retirement account? How much more? (4 pt
Andre wants to buy a new car in a few years. He sets a goal to have (c) $42,629 in his savings account in
order to buy a new car. Andre plans to save money for 5 years by making monthly deposits to a savings
account that has an APR of 2.75% compounded monthly. Round answers to two decimal places.
a. In order for Andre to reach his savings goal, how much will Andre need to save each month? (3 pt)
b. Overall, Andre contributed how much of his own money into the savings account? (4 pt)
5. Walter is Andre’s friend and is impressed by the new car. As such Walter thinks it’s a good time for a new car
as well. Since Walter has not been saving money, he plans to take out a loan to pay for the car. He is able to
finance (c) $42,629 with a 5-year loan. The loan has an APR of 6.15% compounded monthly. Round answers
to two decimal places.
a. What is the minimum payment amount Walter will need to make for his car loan? (3 pt)
b. How much will Walter pay altogether over the life of his car loan? (4 pt)
6. Both men purchased a (c) $42,629 car. Who spent more of their own money for the car and by how much?
Round to two decimal places.
Morgan recently graduated college with their degree and owes (d) $22,208 in student loans with an APR
of 5.8% compounded monthly. They are expected to pay off the loan in 15 years. Round answers to two
decimal places.
a. Under the current terms of their loan, what is Morgan’s minimum monthly payment? (3 pt)
b. What is the total amount Morgan will pay when the loan is complete? (4 pt)
c. How much will Morgan pay in interest? (4 pt)
8. Morgan decides to pay more than the required minimum monthly amount for their loan to pay off the loan
faster. They want to have the loan paid in full after 10 years. Round answers to two decimal places.
a. Assuming all the same conditions of the original student loan, what would Morgan’s new monthly
payment need to be if they wanted to pay off the loan in 10 years? (3 pt)
b. What is the total amount Morgan will pay if they pay off the loan in 10 years? (4 pt)
c. With the 10-year loan, how much will Morgan pay in interest?
Compare the 15-year loan to the plan to pay off the loan in 10 years instead. Answer in complete sentences.
a. Which plan will allow Morgan to pay less per month? How much less? (3 pt)
b. Which plan will allow Morgan to pay less overall? How much less? (3 pt)
Part 4: Mortgages
10. The Yang family plans to buy a new house soon and is considering mortgage options. They are considering
two options, a 15-year mortgage with an APR of 6.3% or a 30-year mortgage with an APR of 7.8%. Both options
compound interest monthly. Currently the Yang family spends (e) $2,530 each month in rent and plan to
spend the same amount on a mortgage payment. They do not currently have a down payment and will finance
the full price of the home. Round answers to whole numbers.
a. If the Yang family chooses the 15-year mortgage, how much will they be able to borrow? (3 pt)
b. If the Yang family chooses the 30-year mortgage, how much will they be able to borrow? (3 pt)
c. Which option will allow the Yang family to borrow the most? By how much? Respond in a complete
sentence. (3 pt)
d. Under which option will the Yang family spend the most overall? By how much? Respond in a complete
sentence.
In parts 1 through 4 of this project, two different financial options are presented. For each part, choose which
option is better and explain why. Complete sentences should be used in each answer and the explanation
should include at least one result from your previous calculations. (4 x 3 pt = 12 pt)
Part 1: Saving for Retirement Options: Start saving for retirement early or wait to save for retirement
Part 2: Buying a Car Options: Save money to buy a car or use a loan to pay for a car
Part 3: Student Loans Options: Pay a loan off over a longer amount of time or shorter amount of time
Part 4: Mortgages Options: Buy a house with a 15-year mortgage or a 30-year mortgage