?
A?
VI
TU
_S
ED
OV
PR
AP
,AP
TABLE OF CONTENTS
PR
Solutions Manual: Personal Finance, 2025 Release
Authors: Jack Kapoor, Les Dlabay, Robert Hughes, Melissa Hart
OV
PART ONE: PLANNING YOUR PERSONAL FINANCES
1. Personal Finance Basics and the Time Value of Money
2. Financial Aspects of Career Planning
ED
3. Money Management Strategy: Financial Statements and Budgeting
4. Planning Your Tax Strategy _S
PART TWO: MANAGING YOUR PERSONAL FINANCES
5. Financial Services: Savings Plans and Payment Methods
6. Introduction to Consumer Credit
TU
7. Choosing a Source of Credit: The Costs of Credit Alternatives
PART THREE: MAKING YOUR PURCHASING DECISIONS
8. Consumer Purchasing Strategies and Legal Protection
VI
9. The Housing Decision: Factors and Finances A?
PART FOUR: INSURING YOUR RESOURCES
10. Property and Motor Vehicle Insurance
11. Health, Disability, and Long-Term Care Insurance
12. Life Insurance
?
PART FIVE: INVESTING YOUR FINANCIAL RESOURCES
13. Investing Fundamentals
14. Investing in Stocks
15. Investing in Bonds
16. Investing in Mutual Funds
17. Investing in Real Estate and Other Investment Alternatives
PART SIX: CONTROLLING YOUR FINANCIAL FUTURE
18. Starting Early: Retirement Planning
19. Estate Planning
,AP 1
Kapoor, Personal Finance
2025 Release
Chapter 1 Solutions
PR
1. Calculating the Future Value of Property. Antonio Lopez plans to buy a house for $280,000. If that real
estate is expected to increase in value by 3 percent each year, what will its approximate value be six
years from now?
Solution: $334,334.64
LO: 1-2
OV
Topic: Calculating the Future Value of Property
LOD: Intermediate
Bloom tag: Application ED
2. Using the Rule of 72. Using the rule of 72, approximate the following amounts.
a. If the value of land in an area is increasing 6 percent a year, how long will it take for property
values to double?
_S
b. If you earn 10 percent on your investments, how long will it take for your money to double?
c. At an annual interest rate of 5 percent, how long will it take for your savings to double?
Solution:
a. about 12 years (72/6)
TU
b. about 7.2 years (72/10)
c. about 14.4 years (72/5)
LO: 1-2 VI
Topic: Using the Rule of 72
LOD: Easy
Bloom tag: Application A?
3. Determining the Inflation Rate. In 2020, selected automobiles had an average cost of $16,000. The
average cost of those same automobiles is now $24,000. What was the rate of increase for these
automobiles between the two time periods? ?
Solution: ($24,000 – $16,000) / $16,000 = .50 (50 percent)
LO: 1-2
Topic: Determining the Inflation Rate
LOD: Medium
Bloom tag: Application
4. Computing Future Living Expenses. A family spends $52,000 a year for living expenses. If prices
increase by 2 percent a year for the next three years, what amount will the family need for their living
expenses after three years?
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
, AP 2
Solution: $55,182.82
LO: 1-2
Topic: Computing Future Living Expenses
LOD: Easy
Bloom tag: Application
PR
5. Calculating Earnings on Savings. What would be the yearly earnings for a person with $8,000 in
savings at an annual interest rate of 2.5 percent?
OV
Solution: $8,000 .025 = $200
LO: 1-4
Topic: Calculating Earnings on Savings
LOD: Easy
Bloom tag: Application
ED
6. Computing the Time Value of Money. Using a financial calculator or time value of money tables in the
Chapter Appendix, calculate the following.
_S
a. The future value of $450 six years from now at 6 percent.
b. The future value of $800 saved each year for 10 years at 8 percent.
c. The amount a person would have to deposit today (present value) at a 6 percent interest rate to
have $1,000 four years from now.
TU
d. The amount a person would have to deposit today to be able to take out $500 a year for 10 years
from an account earning 7 percent.
Solution:
a. $638.33
VI
b. $11,589,25
c. $792.09
d. $3,511.79
LO: 1-4
A?
Topic: Computing the Time Value of Money
LOD: Medium ?
Bloom tag: Application
7. Calculating the Future Value of a Series of Amounts. Elaine Romberg prepares her own income tax
return each year. A tax preparer would charge her $70 for this service. Over a period of 10 years, how
much does Elaine gain from preparing her own tax return? Assume she can earn 3 percent on her
savings.
Solution: $70 11.464 = $802.47
LO: 1-4
Topic: Calculating the Future Value of a Series of Amounts
LOD: Difficult
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
A?
VI
TU
_S
ED
OV
PR
AP
,AP
TABLE OF CONTENTS
PR
Solutions Manual: Personal Finance, 2025 Release
Authors: Jack Kapoor, Les Dlabay, Robert Hughes, Melissa Hart
OV
PART ONE: PLANNING YOUR PERSONAL FINANCES
1. Personal Finance Basics and the Time Value of Money
2. Financial Aspects of Career Planning
ED
3. Money Management Strategy: Financial Statements and Budgeting
4. Planning Your Tax Strategy _S
PART TWO: MANAGING YOUR PERSONAL FINANCES
5. Financial Services: Savings Plans and Payment Methods
6. Introduction to Consumer Credit
TU
7. Choosing a Source of Credit: The Costs of Credit Alternatives
PART THREE: MAKING YOUR PURCHASING DECISIONS
8. Consumer Purchasing Strategies and Legal Protection
VI
9. The Housing Decision: Factors and Finances A?
PART FOUR: INSURING YOUR RESOURCES
10. Property and Motor Vehicle Insurance
11. Health, Disability, and Long-Term Care Insurance
12. Life Insurance
?
PART FIVE: INVESTING YOUR FINANCIAL RESOURCES
13. Investing Fundamentals
14. Investing in Stocks
15. Investing in Bonds
16. Investing in Mutual Funds
17. Investing in Real Estate and Other Investment Alternatives
PART SIX: CONTROLLING YOUR FINANCIAL FUTURE
18. Starting Early: Retirement Planning
19. Estate Planning
,AP 1
Kapoor, Personal Finance
2025 Release
Chapter 1 Solutions
PR
1. Calculating the Future Value of Property. Antonio Lopez plans to buy a house for $280,000. If that real
estate is expected to increase in value by 3 percent each year, what will its approximate value be six
years from now?
Solution: $334,334.64
LO: 1-2
OV
Topic: Calculating the Future Value of Property
LOD: Intermediate
Bloom tag: Application ED
2. Using the Rule of 72. Using the rule of 72, approximate the following amounts.
a. If the value of land in an area is increasing 6 percent a year, how long will it take for property
values to double?
_S
b. If you earn 10 percent on your investments, how long will it take for your money to double?
c. At an annual interest rate of 5 percent, how long will it take for your savings to double?
Solution:
a. about 12 years (72/6)
TU
b. about 7.2 years (72/10)
c. about 14.4 years (72/5)
LO: 1-2 VI
Topic: Using the Rule of 72
LOD: Easy
Bloom tag: Application A?
3. Determining the Inflation Rate. In 2020, selected automobiles had an average cost of $16,000. The
average cost of those same automobiles is now $24,000. What was the rate of increase for these
automobiles between the two time periods? ?
Solution: ($24,000 – $16,000) / $16,000 = .50 (50 percent)
LO: 1-2
Topic: Determining the Inflation Rate
LOD: Medium
Bloom tag: Application
4. Computing Future Living Expenses. A family spends $52,000 a year for living expenses. If prices
increase by 2 percent a year for the next three years, what amount will the family need for their living
expenses after three years?
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
, AP 2
Solution: $55,182.82
LO: 1-2
Topic: Computing Future Living Expenses
LOD: Easy
Bloom tag: Application
PR
5. Calculating Earnings on Savings. What would be the yearly earnings for a person with $8,000 in
savings at an annual interest rate of 2.5 percent?
OV
Solution: $8,000 .025 = $200
LO: 1-4
Topic: Calculating Earnings on Savings
LOD: Easy
Bloom tag: Application
ED
6. Computing the Time Value of Money. Using a financial calculator or time value of money tables in the
Chapter Appendix, calculate the following.
_S
a. The future value of $450 six years from now at 6 percent.
b. The future value of $800 saved each year for 10 years at 8 percent.
c. The amount a person would have to deposit today (present value) at a 6 percent interest rate to
have $1,000 four years from now.
TU
d. The amount a person would have to deposit today to be able to take out $500 a year for 10 years
from an account earning 7 percent.
Solution:
a. $638.33
VI
b. $11,589,25
c. $792.09
d. $3,511.79
LO: 1-4
A?
Topic: Computing the Time Value of Money
LOD: Medium ?
Bloom tag: Application
7. Calculating the Future Value of a Series of Amounts. Elaine Romberg prepares her own income tax
return each year. A tax preparer would charge her $70 for this service. Over a period of 10 years, how
much does Elaine gain from preparing her own tax return? Assume she can earn 3 percent on her
savings.
Solution: $70 11.464 = $802.47
LO: 1-4
Topic: Calculating the Future Value of a Series of Amounts
LOD: Difficult
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
