FINANCIAL ASSISTANT
Contents
1. ASB Bank Poh tpl Effective Rote 69754 Interest Rate Three Unassigned Effective Rate hh ANZ Bonk Int compounded o Daily COMPARE INTEREST RATES Use this worksheet to convert and compare interest rates with varying magnitudes and compounding frequencies Interest rates are normally expressed as a Nominal Rate which reflect an annual rate that is compounded period ically e g 6 8 compounded Quarterly When investments have different compounding periods i e monthly vs quarterly then Effective Rates are used to compare them The Effective Rate is an annual measure of an interest rate that fully reflects the effects of compounding In personal finance the effective rate is commonly called the Annual Percentage Rate APR Example problem e Which of the following offer the best interest rate ANZ Bank 6 7 annual interest compounded daily ASB Bank 6 8 annual interest compounded quarterly COMPOUND AMOUNT AND INTEREST 12000 Use this worksheet to calculate the compound amount Principal Amount 1000 and compound interest of a loan or investment Term 1 lithe Annual Interest Rate A Compound interest is interest for one period that is Interestis paid o Daily added to the principal before the interest for the next period is calculated Compound Amount 13 043 40 Interest Earned 43 40 The Interest is paid interval determines how often the interest is calculated and added to t2. Example problems If you have a 200 000 loan requiring a monthly payment of 800 at 6 interest for 20 years and you make an addi tional principal payment of 10 000 what is the Amount saved How much is your Term reduced by on a bank loan of 5 000 being repaid over 3 years if you make an extra payment of 400 at the end of the year REFINANCING YOUR MORTGAGE Use this worksheet to determine how soon a refinanced mortgage will pay for itself that is how soon it will pay for the closing costs and penalties of the former mort gage Your tax rate is the percentage of combined taxes you pay on earnings during a year your tax bracket Tax Deductible closing costs can be deducted from income before taxes The after tax rate of return is the percentage return you really get from an investment after you pay tax on the profit Example problem e If you refinance your mortgage at a lower interest rate so your monthly payment is 700 instead of 800 when will you actually start saving money Standard vs Balloon hlortgage Standard Mortgage BMS Loon Total interest 57 638 32 Total Principal 120 000 00 Total Repoyable 177 638 32 Balloon Mortgage ANZ Loon Total interest 61 075 83 Total Principal 115 924 17 TotalRepayable 177 000 00 Balloon Mlortgage Loan Hame ANZ Loon 12 Loan Term 15 Balloon Fowment Ann Interest Roteb 5 6 What s Your Balloon Poyment Loan Amount 25000 Lo
3. FINANCIAL ASSISTANT All Worksheets Estimate Risk and Return Future Yolue of a Lump Sum Future Yalue of Money Get gLoan How Much Can You Borrow How Much Lite Insurance Lease or Buy Maintain Your Purchasing Power Woke on Extra Payment TIP Enter the first letter of a worksheet name to quickly advance the list to the applicable work sheet MAGAZINE FINANCIAL ASSISTANT All Worksheets Estimate Risk and Return Future Yolue of a Lump Sumi Future alue of Money i Get a Loon L Worksheet Description E Worksheet Examples Add to Foyorites Remowe from Faworites TIP Tap and hold the stylus on the worksheet name for a fraction of a second to quickly access the worksheet details The main worksheet list provides a collection of 45 intuitive fill in the blanks worksheets conveniently grouped into 8 categories Each worksheet has been especially designed so non experts and experts alike can make over 150 real world financial decisions including e Loans Leasing and Mortgages e Marketing and Investment Analysis e Personal Finance e Everyday Math e Lease vs Buy e Retirement Planning e Long Term savings Tap the Worksheet category popup menu shown as All Worksheets in the above illustration to display a list of all worksheets associated with a financial category FAVORITE WORKSHEETS In addition to the precompiled worksheet categ
4. nsert from the popup menu 3 Anew cash flow entry will be inserted before the selected item To delete a cash flow item 1 Tap the item number of the cash flow item 2 Select Delete from the popup menu Example problem What is the nternal Rate of Return for an investment that requires a cash outlay of 50 000 with annual cashflows of 3 x 5000 4 x10000 O and 3 x 15000 dollars 21 Property s Capitalization Rate Annual Rent Income Operating Expenses vacancy Allowance Market Value The Capitalization CAP Rate is 24000 9450 0 LE eee Gi 150000 T 3000 tis Estimate Return on Storck Risk Free Rote Return on Market The Investment s Beto Yalue Expected Return is ener t Po t e ener 2000 Maintain Purchasing Power Inflation Rate Marginal Tax Rate To maintain Your purchasing power the required rate of return is PEE A E 40541 CAPITALIZATION RATE FOR PROPERTY Use this worksheet to calculate the capitalization rate for an investment property The Capitalization Rate is the ratio of a property s annual net operating income to its market price You can use it to compare the returns on rental properties the higher the capitalization rate the greater the return or chances of producing reliable income The Vacancy Allowance is the percentage of annual rent you may lose while the property is vacant Example problem What is the Capitalization Rate of a duple
5. CD into your CD ROM drive The installer should automatically activate If not then select Run from the Windows Start menu and enter x setup where x is the letter assigned to your CD ROM drive Follow the installer s instructions on screen Select the correct user name for your handheld and click on the Next button Press the HotSync button to install the applica tion and glossary data onto your handheld Now follow the steps overleaf to activate the application Macintosh installation instructions 1 w N Insert the Financial Assistant CD ROM into your Macintosh CD ROM drive Double click on the installer icon Follow the instructions on screen Ensure you select the correct user name when prompted Press the HotSync button to install the applica tion and glossary data onto your handheld Now follow the steps overleaf to activate the application SD Card installation instructions 1 2 Insert the Financial Assistant SD card into your handheld s expansion slot Follow the steps overleaf to launch and activate the application launching the financial assistant 12 04 prn Unfilled Fin Assistant Software Activation Pledse enter your personal software activation code as found on the inside of the CD ROM case or Registration Card and tap the Register button below Owner Mame Tom Trump Your User ID 2773 0254 Enter Code Once installed the icon depicted to the left will app
6. TO USE THE SOFTWARE OR ACCOMPANYING WRITTEN MATERIALS REGARDLESS OF THE BASIS OF THE CLAIM AND EVEN IF LANDWARE OR A LANDWARE REPRESENTATIVE HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE AND EVEN IF A REMEDY SET FORTH HEREIN IS FOUND TO HAVE FAILED OF ITS ESSENTIAL PURPOSE Land Ware s sole liability to you for any direct damages for any cause whatsoever and regardless of the form of the action will be limited to the greater of 50 or the money paid for the LandWare Software based on fair market value of the Software that caused the damages THIS LIMITATION WILL NOT APPLY IN CASE OF PERSONAL INJURY ONLY WHERE AND TO THE EXTENT THAT APPLICABLE LAW REQUIRES SUCH LIABILITY BECAUSE SOME JURISDICTIONS DO NOT ALLOW THE EXCLUSION OR LIMITATION OF LIABILITY FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES THE ABOVE LIMITATION MAY NOT APPLY TO YOU 5 Consumer Information As a condition of this License LandWare may gather end user registration and hardware and software version information This information will be used to notify customers and make decisions about support product and business issues 6 General This Agreement sets forth LandWare s entire liability and your exclusive remedy with respect to the Soft ware You acknowledge that this Agreement is a complete statement of the agreement between you and LandWare and that there are no other prior or contemporaneous understandings promises representations or descriptions regarding
7. and your marginal tax rate is 26 3 22 personal finance HOW MUCH LIFE INSURANCE Use this worksheet to determine the amount of life insurance coverage your beneficiary may need to cover future expenses in the event of your untimely death Beneficiary s Capital 243 950 67 A beneficiary is someone you name to receive income from your insurance policy Life Insurance Needed 254 950 67 Probate costs are the fees associated with registering and certifying a will The Investment Yield is the yearly rate your beneficiary earns on the insurance capital The higher the yield the less capital you need Beneficiary s Capital Example problem How much Life Insurance do you need so that your benefi ciary can receive 10 000 cash and enough capital to have a monthly income of 1 200 for 20 years YOUR NET WORTH Liquid Assets 4735 69009 Use this worksheet to record your total assets and total Retirement Assets PE 93 000 00 liabilities and to determine your net worth Most people Investment Assets 7 300 00 know their credit card balance but not their net worth Fersonal Assets F 23 00000 a much more important number Total Asset 256 890 Short Term Liabilities 2 300 00 Your Net Worth is the difference between your Total Long Term Liabilities 25670 00 Assets and Total Liabilities In other words what you own Total Liabilities 27 970 minus what you owe YOUR MET WORTH 228 920 This worksheet i
8. automati cally updated Example problems TIP This worksheet is also available as a free stan e How much is the tip on a lunch bill of 106 00 split 4 ways dalone application which includes extensive Tipol if each person pays 31 00 ogy 101 advice on tipping etiquette Full details can be found at www landware com tipassistant What percentage does a 16 tip paid on top of a 120 bar tab represent How much does each person from a group of five pay on a 230 bill with a 18 gratuity fee added buy lease or rent COMPARE LEASES Use this worksheet to compare the costs and payment Annual Interest Rate 45 O w features of different leases Take Purchase Option O Tap the First Lease Cost button to enter the details of the first Lease Repeat for the second Lease If you plan to First Lease Cost L83035 buy the item when the lease ends tap the Take Pur chase Option check box and enter a Purchase option SecondLease cost if 23 94465 price within the details slip of each lease You may also agree to make an extra Balloon Payment when the lease ends On some leases you can Defer payments for a specified number of periods Tap the Compare button to view a summary of the Item Lease 1 Lease 2 leases costs as shown to the left PY Costs Periodic Prots 30 369 23 620 Saa Downpayment D 300 Use the Total PV Cost Present Value capitalized cost Balloon Frnt 0 D and Annual PV Costin the comparison s
9. the end of the compounding period THE FUTURE VALUE OF MONEY Use this worksheet to determine the future value of periodic payments you are paying or receiving today The Future Value of money is the value at a given future date of a series of equal payments you are making or receiving compounded at a given interest rate Use the future value to compare different investment opportuni ties or potential obligations Enter the Payments per Year to specify how often payments are made e g 12 for monthly payments 2 for Bi Annual payments etc Example problem What is the Future Value after a 20 year term of a retire ment account to which you contribute monthly payments of 100 and which earns 8 25 interest THE PRESENT VALUE OF MONEY Use this worksheet to determine the current value of periodic payments you will pay or receive in the future The Present Value of money is today s value discounted at a given Annual Interest Rate of periodic payments you will make or receive in the future Use the Present Value to compare different investment opportunities or potential obligations To a lender or borrower Present Value is the amount of a loan to an investor Present Value is the size of the initial investment Example problems e What is the Present Value of 5 annual payments you will receive of 6 000 if the interest rate is 9 make investments Bond Price and Yield Annual Coupon Rate 9 75 hi Sett
10. tuition fees for 4 years What Current Savings should you have if you plan to set aside 1 000 each year to pay 20 000 tuition in 8 years 28 REACH YOUR SAVINGS GOAL Annual Yield 5 6 2 __ Use this worksheet to determine how you can save a Savings Period Years certain amount of money over a specified period of time Contribution Interval Monthly Me t 1 003 79 The Annual Yield is the expected return such as inter Regular Contribution 500 est dividends or profit on money you save each year Ending Balance D 20000 Tap Balance in Today s to see how inflation affects the Ealance in Today s E purchasing power of your money Predicted Inflation 24 t Tap the button to track the expected accumulation w Interest Ealance of savings If you enter a Predicted Inflation rate this iv Z a cL p 704 ET 01068 schedule also shows the increase in the contributions 5 4 4 951620 necessary to maintain your savings goal a 11 51 023 11 Example problems 14 22 3 531 40 F Jg d d 041 10 If you deposit 500 per month for the next 3 years what E z gt starting savings balance do you need to build your savings T 19 08 4552 19 to 20 000 1 53 264 68 What regular contribution must you make to save 10 000 3 24 00 2218 58 in 5 years for a new car if you have saved 500 already Total l r r e What is your end savings balance if you deposit 110 a h for 5 years RETIRE RICH Ann Pensi
11. 00 Total 0 000 00 ANALYZE YOUR CASH FLOW Use this worksheet to analyze investments that involve cash flows money paid out or received of uneven amounts that occur on an annual basis The Net Present Value NPV of an investment is the present value of the expected future cash flows minus the cost or cash outflows at a given interest rate One of three possible results will be displayed 1 A positive value Revenue target exceeded an effective investment 2 Zero Revenue target met 3 A negative value Revenue target has not been attained an ineffective investment The Net Future Value NFV is the future value of all cash inflows and outflows at a given interest rate The Net Uniform Series represents the amount that is equivalent to the series of cash flows having a PV equal to the NPV The Internal Rate of Return IRR is the return at which future cash flows discounted back to today equal the initial cash outlay If the nternal Rate of Return is greater than the desired rate of return or the Net Present Value is positive the investment is considered financially attractive To add a cash flow item 1 Tap the Add Button 2 Enter the cash flow amount into the Amount field Enter cash outflows as negative values 3 Enter the number of times a cash flow amount occurs consecutively in the occurrences field To insert a cash flow item 1 Tap the item number of the cash flow item 2 Select
12. Assistant worksheet has been designed for a specific purpose the worksheets have many features in common Once you are familiar with these features you can use any worksheet in the collection with confidence The Financial Assistant contains a vast variety of work sheets which all share the common format illustrated to the left ENTERING INFORMATION You can enter data directly into the fields identified with a dotted underline using graffiti the handheld s keyboard or the integrated onscreen number pad a secondary details slip This slip allows you to enter further information that generates the result for that field Some worksheets can solve multiple problems for a given set of input values The current result field is indicated by white text on black background e g Current Savings in the above illustration To choose an alternative calculation within a worksheet tap any field name with an icon e g Annual Yield Annual Contri bution Ann Retire Income etc Calculation results are automatically displayed once a valid set of input values have been entered USING THE ONSCREEN NUMBERPAD The Financial Assistant provides an integrated on screen number pad to help enter and calculate data To use the on screen number pad 1 Tap twice quickly on an empty field The key pad to the left will appear 2 Tap inthe digits of the desired number 3 Tap OK The number pad facilitates on the fly calculations a
13. Tap the Compare button to view a summary of the Rent verses Buy costs as shown to the left The Investment month value on the compare schedule is the difference between Total Monthly Cost and Monthly Rent The Effective Yield value on the compare schedule is the annuallized return received when you purhcase the property which fully reflects the costs of ownership Example problem e Which would be wiser to buy a condominium with a 20 000 down payment and 689 mortgage payments or to invest the 20 000 and rent the apartment for 700 per month savings and retirement Plan Your Child s Tuition Annual Tuition cost 6000 Enrollment StartsIn amp years Tuition Duration 4 years Rate of Return 48 i Predicted Inflation 2 amp Current Savings gt 0 it ao nterest 0 00 131 06 263 42 412 36 a T2132 ped 32 S92 5F Oo m A G c M Total 3 257 65 PLAN YOUR CHILD S TUITION Use this worksheet to determine how much you must save Annual Contribution to pay for tuition in the future The Rate of Return is the annual interest rate you expect your Savings to earn Enter a Predicted Inflation rate to adjust tuition costs If you do not have any savings enter O into the Current Savings field Tap the button to generate the expected savings and expenditure schedule shown to the left Example problems e What Annual Contribution must you make to be able to pay 6000 a year in
14. arkup PRICES OF MULTI SIZED PACKAGES Use this worksheet to compare the prices of two pack ages regardless of their sizes or units of measure Example problems e Is it cheaper per pound to buy 1000 pounds of crushed granite for 360 or 1 ton for 685 Is the 2 50 1 liter bottle of juice really cheaper than the 3 00 1 5 quart bottle if you compare their prices in quarts SAVE BY BUYING IN BULK Use this worksheet to calculate the price per unit of an item sold in bulk and to determine if you save money by buying the item in bulk rather than in single units Example problems What are your Total Savings and Percent Savings if you buy 12 boxes of disks for 99 99 rather than 1 box for 9 79 Is it cheaper to buy a 24 can box of soda for 15 00 or indi vidual cans at 70 cents each 25 SPLIT A BILL TAX AND TIP Base Amount 97 47 Use this worksheet to calculate tax service gratuity and divide a bill evenly amongst a group of people SUBTOTAL 106 Simply enter the tax inclusive Subtotal of the restaurant 18 47 4 Tip 1800 bill to have the Base Amount and Tax portions automati cally calculated This allows you to quickly verify the TOTAL 124 00 restaurant s Tax calculation and addition Humber of people All Amount per person 31 00 Tap the amp and buttons at the bottom of the screen to round the Amount per person and TOTAL up or down to the next whole dollar The Tip percentage is
15. ch as a home your are likely to get a loan for most of the purchase price The remainder the amount you have to pay in cash will determine what you can afford to buy Be sure to take into account all possible expoenses you want to make sure you have enough cash A down payment is a partial payment of the offer price You can enter the down payment as a percentage of the offer price Downpayment or as an amount Down payment Amt Tap the Financing Costs Legal Fees Other Payments and Cash Receipts buttons to enter the respective costs The seller may expect reimbursement for certain pre paid expenses such as property tax and utility bills You might have to pay Discount Points if you get a Fed eral Housing or Veteran s Administration loan to finance the purchase Each point is 1 of the loan amount You pay a Recording Fee to record your title to the prop erty the deed in the county courthouse You pay an attorney a title option fee to review title evi dence and render an option about the condition of the title that is whether the seller really owns the property and if there are any liens against it Compare Loans Loans Loon w Poyment ow Interest 3 Year Loon 361 04 1717 44 2 Year Loon 456 39 963 36 20 Yr Loon 1 659 96 585 290 40 20 Yr Loan b46 22 55 092 80 Get aLoan a Loan Poyments per Year 12 Loan Term 5 enue t 2 035 14 TECH NOTE Interest is compounded at the same frequency as paym
16. chedule to Security Dep 0 20 compare the true costs of the two leases Purchase Opt Example problem Total PY Cost 30 369 23 945 e Which office equipment lease is better one that requires 12 Annual PY Cost 10 123 7 982 payments per year of 900 and no down payment or secu rity deposit or one that requires 12 payments per year of 700 with a down payment of 300 and a security deposit of 200 26 Lease or Buy or Buy LEASE OR BUY Furchase Frice 20000 Use this worksheet to compare the costs and features of Tem 5 w Years leasing versus buying Residual Value 25 H Buy Downpayment 2000 eee An item s Residual Value is its value expressed as a Annual Interest Rate 56 percentage of the original purchase price after you pay Monthly Payment 344 65 off the loan Equity at End of Term 5 000 00 Equity at End of Term is the value of the item expressed Lease Downpayment 1000 in dollars after you pay off the loan Done 3X compare Help Tap the Compare button to view a summary of the Buy and Lease costs as shown to the left Buy Lease The Lease verses Buy line details the cost difference Price 20 000 20 000 between leasing the item and buying it A negative Downpayment 2 000 1 000 value indicates that Buying would be financially less Monthly Frnt add 299 desirable Poyment Total 20 67 17 940 Residual Value 25 Example problem End Term Equity C000 a e Do you pay
17. d by Clinton Logan and LandWare Inc in cooperation with MONEY Magazine disclaimer of warranty The set of worksheets contained within this application are designed as self help tools for your independent use It is important to note that their applicability to your circumstances cannot be guaranteed We encourage you to seek personalized advice from qualified profes sionals regarding all personal finance issues copyright and distribution notice The MONEY Magazine Financial Assistant application and user manual is 2002 LandWare Inc All Rights Reserved MONEY 101 content is copyright 2002 CNN America Inc An AOL Time Warner Company All Rights Reserved MONEY is a registered trademark of Time Inc Used under license The Glossary content is 2002 Campbell Harvey IMPORTANT NOTE The Financial Assistant is a commercial product and is protected by strict copyright laws The distribution of your personal activation code is prohibited technical support If you have any technical questions concerning this product we encourage you to contact us via our online support center at www landware com help Our online support center contains a significant amount of support information including solutions to frequently asked questions latest versions and operational tips Technical support is also available via phone Monday to Friday from 9 00 am to 6 00 pm EST at 201 261 7944 When you call please have available your organiz
18. e letter Dollars in your home currency ISO 4217 code has been entered for each currency Depreciation Method Original Asset Cost Asset Salvage Value Expected Asset Life Length of 1st Year Cale Value After ww Str Line 12 wears 12 months Deprectoted value Accum Depreciation 19 500 00 5 500 00 Depreciation w Depreciate 0 00 1833 33 1833 33 1 833 33 1833 33 1833 33 1833 33 1833 33 2 000 00 w Remaining 25 000 00 23 166 67 21 333 33 19 500 00 17 666 67 15933 23 14 000 00 12 166 67 A hal DEPRECIATION Use this worksheet to determine the depreciation of an asset using three common calculation methods Depreciation is the allocation of an asset s cost to future income periods over which the asset is used Use the Straight Line method Str Line if the asset depreciates the same amount every year Use the Sum of years digits method Sum of Yrs if the asset depreciates more in the early years Use the Declining Balance method Dec Balance if the asset depreciates at a certain percentage the Declin ing Balance factor of its original value each year If you are using the Declining Balance method enter the declining balance factor as an Annual Discount per centage off the original value or as a multiple of the straight line depreciation rate Str Line Multiple The Asset Salvage Value is its estimated selling price at the end of the depreciation period Enter
19. e screen Description 2 Select WorkSheet Description from the popup menu creating financial schedules Obtaining detailed insight into your financial planning is aS easy as a Single tap The Financial Assistant provides customizable schedules for its savings mortgage loan and depreciation worksheets Reach four Savings Goal To create a schedule for a given worksheet Period w nterest w Bolonce 1 Enter the data into the worksheet 1400 d d 2 Tap the schedule button 20 50 934 3 The schedule will be generated on screen 2f 08 111 1 Fe To advance the schedule to a given payment or period 40 53 365 1 Tap the Show button 47 40 B83 2 Select Specific Item oda oF 3 Enter the payment or period number 61 43 elite 4 Tap the OK button Total 1 624 37 using the financial glossary The Financial Assistant provides a financial glossary Financial Glossary which covers all aspects of business and finance abe det N Jk mono par stu yz P GEF To lookup a financial term general ledger 1 Tap the glossary button General obligation bonds 2 General partner l Enter the first letter of the term you want to find see ee eee ae into the Look Up field The list will scroll to the financial terms that start with that letter Accounting records that show all l ea e a 3 Continue entering characters until the term you of a business are looking for is highlighted or visible 4 The definit
20. ear in the application launcher of the handheld By default it is placed in the Unfiled category Tap the icon to launch the application PRODUCT ACTIVATION The Financial Assistant will function for 14 days before requiring you to enter a valid activation code This period is provided for the express purpose of product evaluation prior to purchasing If you have already pur chased this product you should enter your personal activation code now This will ensure you are able to use the application on an ongoing basis If you obtained the Financial Assistant electronically 1 Launch the Financial Assistant application 2 Tap the Register Now button 3 Enter your personal activation code as pro vided by the LandWare sales representative onto the Enter Code field 4 Tap the Register button If you obtained the Financial Assistant on a CD ROM 1 Launch the Financial Assistant application 2 Tap the Register Now button 3 Enter your personal activation code as found on the inside of the CD ROM case 4 Tap the Register button If you obtained the Financial Assistant on an SD card 1 Insert the Financial Assistant SD card into your handheld s expansion slot 2 Launch the Financial Assistant application Tap the Register Now button 4 Enter your personal activation code as found on the product registration card 5 Tap the Register button w OPERATIONAL OVERVIEW the main worksheet list view MAGAZINE
21. ents are made You may have to pay a transfer tax to transfer the prop erty title A Cash receiptis an amount the seller owes upon your purchase of the property The Cash Needed to buy is the amount you need avail able immediately upon purchase including the down payment Example problems How much cash is needed to buy a house if you offer 225 000 with a 10 down payment and 5 000 of repairs and 1000 legal fees are needed immediately COMPARE LOANS Use the worksheet to calculate and compare the payment principal and interest of different loans Tap the New Loan button to enter the details of the new Loan Tap the Loan entry line to edit or delete the loan Example problems e Do you pay more Interest on a 12 000 loan over 3 years or a 10 000 loan over 2 years if the other loan conditions are the same e What is your monthly payment for a 100 000 loan you must pay back over 20 years if the interest rate is 5 com pared with 4 75 GET A LOAN Use the worksheet to determine the annual interest rate amount or periodic e g monthly payment of your loan The Loan Term is the length of time you have to pay back the total Loan Amount Most loans require 12 payments per year one each month It is assumed that you make the payment at the end of each period Example problems What would your Payment be each month on a 10 000 loan at 7 interest for 5 years What Loan Amount can you aff
22. er the Financial Assistant software and a brief description of the problem Having this information will ensure faster service from our Customer support representatives product updates Free maintenance updates to the application are avail able to all registered owners Full information can be found at www landware com upgradeinfo 3 GETTING STARTED welcome Thank you for choosing the MONEY Magazine Financial Assistant for Palm OS We have worked hard to make this product a powerful yet easy to use financial tool for personal and business use We hope that you will soon find it to be an invaluable addition to your handheld HANDHELD REQUIREMENTS Palm OS 3 0 or greater Financial Assistant application 415K Money 101 Tutorials database 30K Standard Glossary database 140K Large Glossary database 546K These databases may be omitted to con serve memory if the glossary and or Money 101 tutorials are not required NOTE To ensure acceptable search and navigation performance the Glossary pdb database must be installed on the hand held s internal memory The application can reside on a Palm OS expansion card if desired The Financial Assistant is a feature rich product so we encourage you read the entire documentation to get the most out of your software installing the financial assistant To install the Financial Assistant follow the steps below Windows installation instructions 1 2 Insert the
23. future value of an initial lump sum of money deposited in an interest earn ing investment account The Investments Future Value is the Initial Investment sum s value at a given future date compounded at a given interest rate Interest is compounded calculated and added to the principal amount at a specified frequency Example problem What is the value after 10 years of a 5000 certificate of deposit CD earning 7 interest per year Sales Volume Price and Profit TIP To find the break even point enter O as the Profit The Term of a Lump Sum Future Value of the Investment Initial Investment Annual Interest Rote Interest is paid Term is Annually 17 57 periods Desired Future Armount Initial Investment Term Interest is added Annual Interest Rote Required is 50000 w Monthly 10 7777 P SALES VOLUME PRICE AND PROFIT Use this worksheet to determine How many units of a product you must sell to make a certain profit or the price you must charge per unit to make a certain profit or the total profit you will make on that product Tap the Variable Costs Unit button to record the costs that vary in relation to the volumn of units sold Tap the Fixed Costs button to record expenses such as packaging design that do not vary with the volume of activity or output of that product To find the gross profit at a given volume tap the Total Profit label and fill in the rest of the wo
24. he principal amount The Compound Amount is the final amount paid or earned principal amount plus Interest Earned Example problems e What is the nterest Earned in 1 month in a bank account holding 13 000 if the interest rate is 4 compounded daily What is the final compound amount you really pay after paying back a 12 000 loan at 6 25 interest over 5 years CURRENCY CONVERSION United States 29999 Use this worksheet to convert between eight user defined currency amounts based on any exchange rate Euro 331 79 UK Pounds 206 02 Enter the currency amount you want to convert from and canada Dollars 4 102 the other currency values will be updated automatically Japanese Yen 38 680 85 To edit the currency labels and or exchange rates Hong Kong 1 Tap the Edit Items button 2 Edit the Name and or Rate field 3 Tap the Save button Hew Zealand Ta a Francs Exchange Rates are specified as a ratio from your base currency The base currency normally corresponds to your home currency and has an exchange rate of 1 0 All other exchange rates are expressed as fractions of the base rate i e Base currency Foreign currency x Rate To import exchange rates from Pocket Quicken 1 Tap the Edit Items button 2 Tap the mport Rates button Example problem TECH TIP For exchange rates to be correctly How much is a DVD player that sells for 670 New Zealand updated you must ensure the correct thre
25. ion of the term will automatically be displayed in the lower half of the screen TIP Tap on the definition text to scroll the term The Financial Assistant offers the choice of two option Sey evel ally installable glossaries A standard 1 700 term edition TIP Tap on the alphabet tabs to quickly advance which covers the core of the business language and an the list to the term that begins with that letter i i Example Tap def to advance to the term beginning encyclopedic version which contains over 7 200 terms with d Tap it again to advance to e Tap it a third and definitions time to advance to f money 101 top things to know i The Financial Assistant includes an optionally installable MONEY O set of electronic tutorials created by the editors at Topics MONEY Magazine Futures and options Health insurance Hiring financial help Horne insurance b h b Each tutorial has been especially designed to help you F F F Investing in bonds F F F ka invest save borrow and spend more wisely Whether you are interested in the basics of banking and saving investing in mutual funds or just want to control your debt the essentials of each tutorial can be easily absorbed while you are on the go Investing in IPOs Investing in stocks Kids and money To access the money 101 tutorial topics 1 Open the main worksheet list view 2 Tap the icon at the bottom of the screen Investing I
26. is expressed as a percentage of the Old Value Tap the Percentage of Total tab to display the worksheet for calculating the percentage a Part of Total represents of a Total Amount Percent of totalis expressed as a percentage of the Total Amount The percentage worksheets calculate any unknown variable as long as the other two are known Example problems By what Percentage Change did your rent increase if it went from 975 to 1 120 per month e What amount of sales tax should you pay on a 287 pur chase if the tax rate is 8 24 Price for Profit Cost or Buy Price 378 50 Sis t SOS 46 Show Comparisonin tons Unit Cost of Package 1 720 00 Unit Cost of Package 2 635 00 Save by Buying in Bulk Total Bulk Cost Humber of terns Regular Prices lterm Bulk Unit Price Total Savings Percent Savings 99 99 12 8 33 17 49 14 89 w PRICE FOR PROFIT Use this worksheet to calculate various relationships between markup margin selling price and cost price Selling Prices are often set using a Markup or Margin on a Cost or Buy Price The Margin is the gross profit rate based on the selling price expressed as a percentage of the selling price The Markup is the gross profit rate based on the cost or buy price expressed as a percentage of the cost price Example problem What is the appropriate Selling Price for an outboard motor that costs 378 50 to make if you want to achieve a 33 m
27. ksheet to determine how much you can withdraw regularly from your savings or the number of months you can withdraw a particular amount Enter a Predicted Inflation rate to adjust the withdrawal amounts so they reflect the impact of inflation Tap the button to generate a schedule of expected withdrawal events Example problems How much can you Withdraw each month if you are earn ing 7 interest on 5 400 an you would like your savings to last 6 months e For what Withdraw Period can you withdraw 700 from a retirement savings account holding 25 000 30
28. lement Date i17 1 01 Maturity Date 163010 Bond Price t 8745 Yield to Maturity 12 1 TIP To ensure responsive data entry performance during Yield to Maturity calculations it is recom mended that the Maturity Date is entered last TECH NOTE All calculations are based on a 365 day year Interest is compounded semi annually Future Yalue of a Lump Sum Initial Investment 5000 Term 10 w egr Annual Interest Rate T hh Interest is compounded Annually The Investment s Future valueis 9 835 76 BOND PRICE AND YIELD Use this worksheet to determine the price you should pay for a bond or the interest rate on a bond held to maturity The Annual Coupon Rate is the interest rate stated on the bond The Bond Price is expressed per 100 face value or in other words the price you really pay for a 100 bond The Yield to Maturity is the actual interest rate you expect for the bond This is usually the prevailing rate on the investment market when you buy the bond Example problems What is the price of a bond you will own from Jan 1 2001 to June 30 2010 if the annual coupon rate is 9 75 and the bond s yield will be 12 What is the yield of a bond with a purchase settlement date of Oct 10 2001 and a maturity redemption date of Oct 10 2011 if the annual coupon rate is 11 and the bond s actual price per 100 is 103 50 FUTURE VALUE OF A LUMP SUM Use this worksheet to determine the
29. lower monthly payments for a 20 000 car at 6 if you buy the car or lease it for 5 years Lease versus Buy Rent or Buy or Buy RENT OR BUY Own Rent Duration 5 2 years Use this worksheet to compare the costs and features of Monthly Rent 700 renting with buying a property Savings Interest Rate 5 5 1 Regl Estate Frice 150000 The Own Rent Duration is the length of time in years Mortgage Payment i pegig you plan to keep or rent the property Mithiy Property Tax 666 67 Monthly Fees e The Savings Interest Rate is the rate you will earn if you Marginal Tax Rate 28 invest your money rather than using It as a downpay Selling Price sa ae ment on the property Property Resale Fees Zoll Done JX campo Fei Tap the Mortgage Payment button to enter the Mortgage details such as Down payment Interest rate and Term The Marginal Tax rate is the tax rate you would have to be paid on any additional dollars of taxable income earned Tap the Selling Price button to enter the annual appreci ation rate the percentage by which the property value increases each year 27 ltem Amount Cost of Selling 3 000 00 Het Sole Proceeds 24 187 50 Effective Yield 12 94 RENT SUMMARY Monthly Rent 700 00 Initial Investment 20 000 00 Investment wWlonth 310 08 Investment Yield c 50 The Property resale fees are the percentage of the sell ing price that you must pay the real estate agent for sell ing the property
30. n mutual funds Top Things to Know Petal irra late lalalime ere To access a money 101 tutorial 1 Scroll to the lesson entry in the list view A mutual fund pools money from 2 Tap onthe lesson name hundreds and thousands of investors e vebis PUE a peb allio ey suete For those who want to dig deeper be sure to visit bonds real estate or other securities according to its charter Each investor www money com pf 101 for greater detail including in the fund gets a slice of the totalpie Calculators quizzes and a library of supplemental mate rials L F 1 What exactly is a mutual fund configuring financial assistant MONEY Magazine Financial Assistant provides a num ber of different options that allow you to customize the way it works Selecting the Preferences command from the Options menu opens the preferences window allow ing you to customize the following General Preferences General Default Yalues Tapping a Field Entry w Places an insertion point EY Double tap opens keypad W Confirm Data Deletion Default Value Preferences Default values Currency symbol Inflation Rate Tax Rate Show favorite worksheets on launch GENERAL PREFERENCES Tap the General tab on the preferences window to spec ify the following attributes Tapping a Field Entry Specify the default editing behavior when you tap on a input field Confirm Data Deletion Financial Assistant will prompt before deleting
31. on Income 10000 Use this worksheet to determine how you can achieve a current Age 38 O years particular income upon retirement Retirement Age 60 years LifeExpectancy 80 years Annual Pension Income is money you will receive upon Tox Rates Peak 7 pEi retirement in addition to your retirement savings Inflation Factor 23 Gadi If you enter an nflation Factor the schedule shows the Annual Yield 55 increase in contributions necessary to maintain your Annual Contribution gt savings goal Tap the Income in Today s checkbox within the nfla tion factor details slip to see the purchasing power your income would have today Amounts decrease when you choose this option because inflation reduces the value of money you save for the future ncome Bolance 0 00 363 070 09 0 00 cial fie 0 00 v4 Example problems 23 098 30 T What must your Current Savings be to have an annual 23 619 33 Jog retirement income of 24 000 for 20 years 24 162 58 What Annual Yield must your savings earn to have such an eq 15 32 income if you are able to contribute 3 000 a year for 30 25 206 34 years Gro 052 77 e What will your Annual Retirement Income be if you have ZER 10 000 in the bank already and plan to contribute 2 500 a year for 20 years 29 Withdraw From Savings With Withdrawl 914 10 315 55 917 61 919 36 921 13 922 92 Total 5 510 96 WITHDRAW FROM SAVINGS Use this wor
32. on Term 4 feds Annual Interest Rote 6 F hh Poyments per Year 12 The Balloon Poyment is duein 3 yeoOrs Balloon payroentis 6 339 60 STANDARD VS BALLOON MORTGAGE Use this worksheet to determine and compare standard and balloon mortgage amounts A balloon mortgage is like an ordinary standard mort gage except you agree to pay off the balance ona certain date when the mortgage officially ends A balloon payment is the balance of the mortgage on the payoff date A balloon payment makes your monthly payment smaller thus it increases the total amount you can afford to borrow When you choose a balloon mortgage over a standard one however you should be sure that you can really afford to make the balloon payment when it is due You can also use the Balloon mortgage details slip to calculate balloon loans and leases as well Example problems Which type of mortgage would carry less Total Intereston a 120 000 mortgage over 15 years e With which type of mortgage could you borrow more Princi pal at a 9 interest rate and payments of 1 200 per month e How much are your payments on a 100 000 mortgage at 7 interest if you plan to make a 15 000 balloon pay ment WHAT IS YOUR BALLOON PAYMENT Use this worksheet to determine the amount of a balloon payment based on the terms of a loan Example problem What final balloon payment must you make if you have a 25 000 loan and 3 years until the ball
33. oon payment is due What s Your Loan Balance Payment per Period 345 Annual Interest Rote hh Loan Term 3 egrs Poyments per Year 12 eiea ilaa t T 920 34 Loon Amount 11 009 57 TECH NOTE Interest is compounded at the same frequency as payments are made Payments are assumed to occur at the end of the compounding period If interest is compounded and applied at intervals that do not coincide with payments i e Canadian Mortgages use the Compare Interest Rates work sheet below to convert the interest rate to an equivalent interest rate with compounding periods that match the regular payments WHAT IS YOUR LOAN BALANCE Use this worksheet to determine the outstanding bal ance of your loan or the number of payments you have made to date The period is the length of time between payments and determines how often interest is added to the loan The Payment per Period is the regular payment amount you make on your loan The Payments per Year field allows you to specify how often payments are made e g enter 12 for monthly payments 2 for Bi Annual etc Example problems e What is your Outstanding Balance on a 3 year loan at 8 interest if you have made 11 payments of 345 each What Number of payments have you made on a 25 year loan at 7 interest if your outstanding loan balance is 124 500 and your monthly payment is 1250 the value of money Compare Interest Rates Effective Rote 6 9289 2
34. ord to borrow if you can repay 4000 a month for 25 years and the current interest rate is 8 e What Annual Interest Rate do you need to borrow 15 000 for 3 year if you can repay no more than 500 per month HOW MUCH CAN YOU BORROW Affordable Monthly Fayment Annual Interest Rate Loan Term The Amount you can afford to borrow is ee 2 Tears 6 633 16 Make an Extra Poyment Poyment per Period Poyments per Year Loan Term Annual Interest Rate Additional Fowment Add Fmt Faid After Amount Saved Term Reduced By 17 030 02 2 15 Years Refinacing Your Mortgage Proposed Payment 700 Your Tax Rote Z8 hh Total Clasing Costs 1000 After Tax Rote of Return 4 5 2i The new loan will poy for itself in 14 15 months Use this form to determine the maximum size of your loan based on how much you can pay each month Example problems How much can you borrow if you can afford a monthly pay ment of 300 for a term of 2 years and the interest rate is 8 What mortgage amount can you afford if you can make monthly payments of 900 over 25 years at an interest rate of 9 25 MAKE AN EXTRA PAYMENT Use this form to help you determine the impact of making an extra payment on a loan The principal is the amount on which interest is charged that is the amount of the loan or mortgage Paying down the principal with extra payments is the fastest way to reduce the interest cost of a loan
35. ories the Financial Assistant allows you to create your own personal list of frequently used worksheets To display your favorite list of worksheets 1 Tap the worksheet category popup menu 2 Tap onthe Favorite Worksheets entry To add a worksheet to your favorite list 1 Scroll to the worksheet entry in the list view 2 Tap and hold the stylus on the worksheet name 3 Select Add to Favorites from the popup menu OPENING A WORKSHEET Tap on the name of the worksheet you want to use Full details are provided on page 7 OPENING THE FINANCE GLOSSARY Tap on the Ex icon to open the Financial Glossary Full details are provided on page 9 OPENING THE MONEY 101 TUTORIALS Tap on the icon to open the Money 101 tutorials reader Full details are provided on page 9 6 working with worksheets Retire Rich Rich Ann Pension income 10000 current Age 3 years Retirement Age 60 years Life Expectancy 0 years Tox Rotes i278 25 Inflation Factor i23 padia TE ae t 166 980 23 Annual Yield gt 5 5 000 4 Annual Contribution gt TIP To validate the current set of values within a worksheet tap on the current result field name with highlighted white on black text TIP To move to the next field enter a return or tab character or press the hardware scroll buttons on the handheld Retire Rich Rich Ann Pension income 6000 _ Current Age 35 Current Age While each Financial
36. owners guide mo ne MAGAZINE FINANCIAL ASSISTANT FOR PALM POWERED HANDHELDS Control your finances with more than 45 self calculating forms auickty sowve OVER 150 FINANCIAL PROBLEMS BY JUST FILLING IN THE BLANKS Annual Tuition Cost Enrolment Startsin 6 yeas Tuition Duration Rate of Return Predicted inflation LandWare Inc Software License Agreement PLEASE READ THIS LICENSE AGREEMENT CAREFULLY BEFORE USING THIS SOFTWARE BY USING THIS SOFT WARE YOU AGREE TO BECOME BOUND BY THE TERMS OF THIS LICENSE IF YOU DO NOT AGREE TO THE TERMS OF THIS LICENSE DO NOT USE THIS SOFTWARE The software Software provided along with this License is licensed not sold to you by LandWare Incorporated LandWare for use only under the terms of this License and LandWare reserves any rights not expressly granted to you You own the media on which the Software is recorded but LandWare and its licensors retain ownership of the Soft ware itself 1 License This limited non exclusive License allows you to a Use one copy of the Software on a single handheld computer at a time To use the Software means that the Soft ware is either loaded on the permanent memory or external memory card of a handheld computer b Make one copy of the Software in machine readable form solely for backup purposes You acknowledge that mak ing additional copies or duplicating the software by any other means incl
37. rksheet Example problem e How many cameras must you sell each month to break even if you buy each camera for 275 sell each for 399 and your fixed costs per month are 5 000 What will your profit be if you sell 100 of these cameras each month THE TERM OF A LUMP SUM Use this worksheet to determine how long it takes an investment to grow to a given value at a specified interest rate and compounding frequency Example problem e How many years will it take you to become a millionaire if you initially invest 100 000 at 14 interest WHAT INTEREST RATE DO YOU NEED Use this worksheet to find the interest rate required for an Initial Investment to reach a Desired Future Amount The nterest is Added or compounded into the invest ment account at regular intervals Example problem What Annual Interest rate will turn a 10 000 investment into 50 000 in 15 years if interest is paid monthly 20 analyze your investments Analyze Your Cash Flow Met Present Value 6 728 63 Met Future Yolue 17 362 73 Met Uniform Series 988 75 Int Rate of Return 11 2996 TECH NOTE This worksheet assumes investments meet the following criteria 1 Initial Investment is a cash outflow 2 Some of the cash flows following the initial investment are positive 3 the sequence of cash flows change signs only once and 4 the sum of the cash flows is positive Analyze Your Cash Flow Item Amount gcur ences Co00
38. s well as the ability to store intermediate results in its continuous memory The number pad s open action double tap by default can be altered in the Financial Assistant s preferences screen Full details are on page 10 7 Compare Loans OPENING A DETAILS SLIP Add New Loan To enter data into a worksheet you occasionaly need to enter secondary information into a popup details slip A details slip is opened whenever you tap on a field with fields on which you can enter data When you close the slip the result or Summary appears in the main work sheet Payment 730 32 Some slips also allow you to customize the field labels to suit the particular problem at hand To erase all data values from a details slip 1 Tap the button All previously entered values will be deleted from the worksheet To delete the entry from the main worksheet 1 Tap the Delete Button This slip is deleted Use this worksheet ta determine along with the corresponding entry on the yworious features of your loan main worksheet Most loans require 12 PAYMENTS USING ONLINE HELP PER YEAR 41 each month It is Help is just a tap away Each worksheet is equipped d that ke th l oe Se ee aa period with a detailed description and a set of examples to further illustrate its use The TERM of a loan is the length of insre guia rei a pcp nee te To access the online help from a worksheet F 1 Tap the Help button at the bottom of th
39. s analogous to a corporation s balance sheet and provides a snapshot of your financial situa tion It is important to gain a clear picture of your net worth before developing a financial plan designed to help you reach your financial goals 23 Use 30 Doy Month Beginning Date and Time everyday math O Percentage Calculations Percent of Total Gaited ele Percentage Calculations ee Percent Change Percent Change Jab ee bes DATES AND TIMES Use this worksheet to calculate the difference between specific dates or times Select the 30 Day Month check box when you want to base the calculations on the 360 day calendar and do not have to know the exact number of days involved in the calculation Tap the Beginning Date or Ending Date selector button to display the Day of the Week Dates are calculated using the exact calendar method which assumes each year except a leap year has 365 days Example problems e For how many days do you earn interest if you open a sav ings account on May 24th and close it December 1st How many hours have you been alive PERCENTAGE CALCULATIONS Use the percentage worksheet to perform various percentage calculations The percentage worksheet is divided into two screens Percentage of Total and Per centage Change Tap the Percent Change tab to display the worksheet for calculating the Percentage change between an Old Value and a New Value Percent Change
40. the Software or any related services This Agreement does not limit any right that LandWare or its Licensors may have under trade secret copyright patent trademark or other laws The Representatives of LandWare are not authorized to make modifications to this Agreement or to make any additional representations commitments or war ranties binding on LandWare other than in writing signed by an officer of LandWare Accordingly any such additional statements are not binding on LandWare and you should not rely upon such statements 7 Governing Law and U S Government Restricted Rights This License will be construed under the laws of the State of New Jersey except for that body of law dealing with conflicts of law If any provision of this License shall be held by a court of competent jurisdiction to be contrary to law that provision will be enforced to the maximum extent permissible and the remaining provisions of this License will remain n full force and effect If you are aU S Government user then the Software is provided with RESTRICTED RIGHTS as set forth in subparagraphs c 1 and 2 of the Commercial Com puter Software Restricted Rights clause at FAR52227 19 o sub paragraph c 1 ii of the Rights in Technical Data and Computer Software clause at DFARS 52 277 7013 as applicable Manufacturer LandWare Incorporated P O Box 25 Oradell NJ application credits First Printing September 2002 This application was designed and develope
41. the remaining Length of 1st year for situations in which the acquisition date of an asset does not coincide with the start of a tax or fiscal year Enter the year for which the depreciation will be calcu lated into the Calc Value After field The Depreciated Value is the difference between the Original Asset cost and the Asset Salvage value Tap the button to instantly view a depreciation schedule on screen Example problem What is the Depreciated value of your new car after 3 years if its original cost was 25 000 its expected life is 12 years its salvage value is 3 000 and you are using the Straight Line method of depreciation Future Value of Money Poyments Year 12 Annual interest Rote 25 00 t Loon Term 20 _ w fears Payment AmountE 100 oe S60 766 02 TECH NOTE Interest is compounded at the same frequency as payments are made Payments are assumed to occur at the end of the compounding period If interest is compounded and applied at intervals that do not coincide with Payments use the Com pare Interest Rates worksheet to convert the inter est rate to an equivalent interest rate that with compounding periods that match the regular pay ments Present Value of Money Periods per Year 1 Future alue 6000 Annual Interest Rote gt 9 tH Loan Term gt 5 ears TECH NOTE Interest is compounded at the same frequency as payments are made Payments are assumed to occur at
42. uding electronic transmission is illegal You may not copy the printed materials if any that accompany the software or duplicate copies of user documentation 2 Restrictions a The Software contains trade secrets in its human perceivable form and to protect them you may not REVERSE ENGINEER DECOMPILE DISASSEMBLE OR OTHERWISE REDUCE THE SOFTWARE TO ANY HUMAN PERCEIVABLE FORM YOU MAY NOT MODIFY ADAPT TRANSLATE RENT LEASE LOAN NETWORK PROVIDE FREE OR CREATE DERIVATIVE WORKS OF OR BASED UPON THE SOFTWARE OR PART THEREOF b You may not transfer all your rights under this License to another party 3 Termination This License is effective until terminated This License will terminate immediately without notice from LandWare or judicial resolution if you fail to comply with any provision of this License Upon such termination you must destroy the Software all accompanying written materials and all copies thereof and Sections 5 6 and 7 will Survive any termination 4 Limitation of Liability and Damages INNO EVENT WILL LANDWARE OR ANY OF THE LICENSORS DIRECTORS OFFICERS EMPLOYEES OR AFFILIATES OF ANY OF THE FOREGOING BE LIABLE TO YOU FOR ANY CONSEQUEN TIAL INCIDENTAL INDIRECT OR SPECIAL DAMAGES WHATSOEVER INCLUDING WITHOUT LIMITATION DAM AGES FOR LOSS OF BUSINESS PROFITS BUSINESS INTERRUPTION LOSS OF BUSINESS INFORMATION AND THE LIKE WHETHER FORESEEABLE OR UNFORESEEABLE ARISING OUT OF THE USE OF OR INABILITY
43. worksheet values Row Shading Select to fill alternate lines in the schedule views with a background color To change the color tap on the Pick Color button DEFAULT VALUES Tap the Default Values tab on the preferences window to specify the following attributes Currency Symbol Specify the currency symbol used within the worksheets Inflation Rate Specify the default inflation rate to use At the time of printing this is approximately 2 3 in the United States Tax rate Specify your current tax rate or tax bracket for which you pay on earnings during the year Show favorite worksheets on launch Select to display the favorite worksheet list every time the Financial Assistant is opened WORKSHEET REFERENCE Each Financial Assistant worksheet is designed for a specific purpose By familiarizing yourself with its unique features you can make the fullest use of each worksheet The explanations in this section include practical examples of how to use each worksheet as well as definitions of financial terms Worksheet field names appear in Italics loans and mortgages Cash Needed to Buy a Home Financing Costs Legal Fees Other Payments Cash Receipts Amount to Finance 202 500 00 Cash Heeded to Buy 28 500 00 Edit Financing Costs Discount Points Appraisal Fee Processing Fee ther CASH NEEDED TO BUY A HOME When you purchase something with a very high purchase price su
44. x that has a mar ket price of 150 000 produces annual rents of 24 000 costs 9 450 a year in operating expenses and has a 15 vacancy allowance ESTIMATE RETURN ON STOCK Use this worksheet to analyze the relationship between an investment s risk and return using the Capital Asset Pricing Model CAPM The Beta Value is a measure of how sensitive an invest ment is to market movements As the Investments Beta Value increases return and risk increase as well The Beta Value can be positive investment rises in value when market rises or negative investment drops in value when market rises The Risk Free Rate Return on Market and Beta values can be obtained through stock brokerage firms or publi cations Example problem The beta value for a company is 1 2 The Risk Free rate of return current rate of Treasury Bill securities is 7 Given 333the expected rate of return for the market as a whole is 9 what is the expected rate of return for the stock MAINTAIN YOUR PURCHASING POWER Use this worksheet to determine the rate of return you need on an investment to maintain purchasing power given the effects of inflation To maintain your purchasing power you must earn enough on your investment to be able to buy the same items in the future you could buy today with that amount Example problem e What Rate of return must you receive on a bond to maintain current purchasing power assuming the inflation rate is 3
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