QRB 501 Week 5 Financial Valuation, Time-Value of Money Cases


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QRB 501 Week 5 Team Assignment Financial Valuation (Time-Value of Money) Cases

QRB 501 Week 5: Barry learned in an online investment course that he should start investing as soon as possible. He had always thought that it would be smart to start investing after he finishes college. And when his salary is high enough to pay the bills and to have money left over. He projects that will be 5–10 years from now. Barry wants to compare the difference between investing now and investing later. A financial advisor who spoke to Barry suggested that a Roth IRA (Individual Retirement Account) would be a good investment for him to start.

AbdolAkhim has just come from a Personal Finance class. He learned that he can determine how much his savings will be worth in the future. Abdol is completing his two-year business administration degree this semester and has been repairing computers in his spare time to pay for his tuition and books. Abdol got out his savings records and decided to apply what he had learned. He has a balance of $1,000 in a money market account at First Savings Bank, and he considers this to be an emergency fund. His instructor says that he should have 3–6 months of his total bills in an emergency fund. His bills are currently $700 a month.

He also has a checking account and a regular savings account at First Savings Bank, and he will shift some of his funds from those accounts into the emergency fund. One of Abdol’s future goals is to buy a house. He wants to start another account to save the $8,000 he needs for a down payment.

At 45 years of age, Seth figured he wanted to work only 10 more years. Being a full-time landlord had a lot of advantages: cash flow, free time, being his own boss—but it was time to start thinking toward retirement. The real estate investments that he had made over the last 15 years had paid off handsomely. After selling a duplex and paying the associated taxes, Seth had $350,000 in the bank and was debt-free. With only 10 years before retirement, Seth wanted to make solid financial decisions that would limit his risk exposure. Fortunately, he had located another property that seemed to meet his needs— a well maintained four-unit apartment. The price tag was $250,000, well within his range, and the apartment would require no remodeling. Seth figured he could invest the other $100,000, and between the two hoped to have $1 million to retire on by age 55.

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