Question

1. Jimmy and Laura Taylor are coming up with an investment plan for college saving. They expect that the total amount of money needed for their kids' college education is $100,000 in 10 years. Assume that they feel comfortable of a 5% investment return. If they have $20,000 saving to in their accounts today, how much do they still need to save each year in the next 10 years to achieve their goal?

	7950.46
	5849.68
	6541.77
	5360.37
	10540.55

2.  

Suppose you would like to invest $15,000 into a mutual fund for six years. The mutual fund has an expected annual return of 10%. It has a 2% front-end load, but no back-end load. It also has a 12b-1 fee of 0.25% and an annual expense ratio of 1%. What is your value of investment in six years net of all fees?

	$25,768.31
	$22,510.95
	$24,653.37
	$22,197.23
	$24,316.05

3.

Please calculate the taxes for an individual with taxable income of $38,800 using the table below.

10%	Up to $10,300
15%	$10,300–$43,500
25%	$43,500–$101,600
28%	$101,600–$201,400
33%	$201,400–$415,150
35%	Over $415,150

	$7,555.
	$6,525.
	$38,800.
	$1,030.
	$5,305.

Answer 1

Begining Value =$20,000

Interest rate =5%

Let us assume Annuity(at every year end) is "X'(Annual Investement needed)

Future value at the end of 10th year =$100,000

Future value =Begining Value*Future value factor for 10th year +Annuity*Future Annuity factor

$100,000= $20,000*1.6289+X*12.5779

12.5779 X= $100,000-$32,578=$67,422

X=$67,422/12.5779=$5360.37

$5360.37 needed to save each year in the next 10 years to achieve their goal

So answer is $5360.37

3.Calculation of taxes for an individual with taxable income of $38,800:

10% upto to $10,300

15% on over $10,300 upto $43,500

Tax = $10,300*10%+($38,800-$10,300)*15%

=$1,030+$28,500*15%

=$1,030+$4,275

=$5,305

Tax for individual is $5,305

So answer is $5,305