Case Study On Finance Question Exercises

- Financial planning tools can help improve financial situation in various ways. It guides one in minimizing expenses and instead, encourages savings. The tools can help one to engage in activities that can generate additional earning to individuals apart from the major activity that gives earning to an individual. By reducing expenses and increasing savings, then the financial situation of an individual improves.
2. The financial goals of a senior in college should be to reduce unnecessary expenses, increase savings, and find alternative sources of income. Such an individual should engage in part time jobs that can earn income to him/her. A decision to have evening classes and work during the day can be a good decision.
For the computer programmer, the financial goals would be to increase savings, increase the time devoted to work so that income increases and search for a better paying job if possible. This will enable the programmer to accumulate more cash to pay school fees and meet expenses when at school.
The couple at the age of 30s should search for better paying job, increase their savings and reduce unnecessary expenses. This will enable the couple meet the educational needs of the children and at the same time engage in their normal activities in life.
Divorcee at the age of 42 should also seek to reduce unnecessary expenditure, engage in income generating activities during free times, and seek better paying jobs. This will help the person meet the educational expenses for his son and the needs of his old father.
3. As individual age, his/her personal income increases due to experience gained at work hence increased wage. The higher the education, the higher the pay to individual hence personal income is high. Those living in towns have lower personal income since live in towns is expensive as compared to live in rural areas.
4. Fun money is needed regardless of the fact that everything is provided for in the budget because there are some leisure activities that people engage in regardless of whether they were not planned for. Therefore, setting this budget aside is important.
5a)
$5+$ 0.25*19= $9.75
9.75*12=$117
b) 2.5/100*815=20.375 dollars
$20.375*8=$163
$8*4=32
$32-$163=-$131
In this case, the individual incurs no costs in maintaining the account. This is because he/she benefits from the interest.
6)
a) Reporting the first day after the card is lost, the liability is zero. Therefore, there is no money lost in this case.
b) if the loss is reported after six days, the maximum loss is $ 500
c) If the loss is reported 65 days after receiving the periodic statement, the individual loses $ 850 which is the total amount withdrawn from the account
7) In choosing the appropriate bank account, the following factors should be considered.
- The charges of maintaining the account.
-Costs per transaction when withdrawing
- The ability to obtain a loan from the bank. (terms and conditions)
- Interest gained by saving in the bank. Rate of interest.
- The minimum balance and charges due to this on the account.
-minimum balance on which interest is earned.