Financial planning

Tax rate:30%
Annual savings (traditional): 10,000. FV=1,242,147. PV=1,242,147 r=6% 30 years PMT=
90240 TAX:*(1-.3)=63168
Annual savings (roth)= 10,000(1-0.3)=7000 FV=869,503. PV=869503. PMT= 63168.45

Career=30 years
R=8.5%

When retirement : no mortgage, payroll tax, savings ssn

ROR=( p1+div1-po)/p0 =(p1-p0)/po captal gains yield +divi/po dividend yield

PORT $=10K=15K=25K=50K
WA=10K/50K=0.2
WB=15/50=0.3
WC=25/50=0.5
ERport=WARA+WBRB=WCRC
=0.2*0.1=0.3*0.08=0.5*0.06
0.074

1. Capitalization of earnings method= FSE/real.

Real=( 1+nominal/1+inflation)-1

Example:
FSE-20k. 10 years. 518323
FSE-10K. 2 Years. 61832
FSE- 12k. 18 years. 59632.
64k-20k. 20 years. 44000

FSE=120k(1-0.18)(1-0.27)=71832

CF0=0
C01=51,832 ENTER F01=10
C02=61,832 ENTER F02=2
C03=59,632 ENTER F03=18
C04= 44000 ENTER F04=20
I=1.075/1.03)-1
NPV=1,087,567.284
ADD FUND 减 investment
Health insurance:
- Premium-monthly payment
- Deductible-out of pocket expanse before insurer starts to pay
- Coinsurance-determines the % of expenses paid by insurer about deductible( before
out-of-pocket max or stop loss)
- Out-of-pocket max-beyond this amount, the insurer pays 100% (before stop loss)
- Stop loss: maximum payout from the policy

Chapter 8:

Robin wants to plan for her daughter’s education. Her daughter, Reese was born today and will
go to college at age 18 for five years. Tuition is currently $15,000 per year, in today’s dollars.
Robin anticipates tuition inflation of 7% and believes she can earn an 11% return on her
investment. How much must Robin save at the end of each year, if she wants to make her last
payment at the beginning of her daughter’s first year of college?

STEP 1:Begin mode:

N=5
1/Y= (1.11/1.07-1)*100=3.738
PMT=15,000
FV=0
PV=69,785.8996

Step 2:
Begin mode
N=18 1/Y= (1.11/1.07-1*100
PMT=0
FV=69,785.8996
PV=36,046.41

STEP 3: END mode

N=18
I/Y=11
FV=0
PV=36,046.41
PMT=4,680.37