1. Research for Monday Night – Your Own Research Housing values Cars values Interest Rate for Cars, Houses, Savings, and Retirement Accounts – Bring your calculator – Journal Entry- What do you spend your money on? What were your most recent, largest purchases? Do you have a checking or saving account? What are your plans in terms of paying for college? Where does your financial literacy come from?

2. Financial Literacy Day 2 Houses Credit Cards Retirement Accounts Cars Assignment

3. Annuity: A series of payments made at regular intervals Present value (PV or P(n)) of an annuity is the principle amount of the loan or investment Future value (FV or F(n)) of an annuity is the maturity value of the loan or investment

4. PV or P(n) in real life Ex. http://www.durhamrealty.biz/4980kingsalmon.htmlhttp://www.durhamrealty.biz/4980kingsalmon.html Suppose you take out a 30 year mortgage for $160,000 with a 5.75% interest rate. (State Employees Credit Union – Fixed Rate) A. What will the monthly payment be B. What will be the amount paid over the life of the loan? C. How much interest did the bank earn on the loan?

5. PV cont… Suppose you took out a 15 year mortgage of $160,000 with an interest rate of 5.75% (State Employees Credit Union – Fixed Rate)(State Employees Credit Union – Fixed Rate) A. What would the monthly payment be? B. How much would you pay total for the loan? C. How much interest did the bank earn on the loan?

6. Other Housing Info Housing Insurance Rate About 30% of your mortgage payments Property Tax Homeowners Association Fees Home Improvement/Repair Rules about real estate Ten Percent Down Interest only for the first five years Additional Costs No Variable Rates!!!

7. Credit Cards Suppose you take out a credit card at 12.99% APR. If you rack up a $2000 bill and only pay the minimum amount $20 a month; how long will it take to pay off the credit card?12.99 Suppose you take out a credit card at 16.99% APR. If you rack up a $2000 bill and only pay the minimum amount $20 a month; how long will it take to pay off the credit card?

8. Future value (FV) Ex. Jim opens an IRA and contributes $2500 per year for 38 years. Overall he earns an average of 2.25%.2.25 a. How much did he pay in all? b. How much does he have total after 38 years? Ex. Suppose I open an IRA and contribute $150 a month for 20 years. If I earn 2.25% a year, a. How much did I pay? b. How much do I have?

9. Tim and Tom Tim and Tom are twins. They both went to work at age 20 in identical jobs. They each receive a $2000 dollar bonus on their birthday each year. Tim was conservative early in life and decided to invest his money each year into a retirement account that earned 2.25% annually. At age 40 he decided to start spending his bonuses on vacations, but the money already in his account remained there and continued earning interest. Tom, however, spent his $2000 dollars for the first twenty years, but at age forty started investing his $2000 each year in an account earning 2.25% interest. How much money does each brother have on his 65 th birthday?

10. Practice 1. Use the PV formula to determine how much each month it will take you to pay off a $200,000 mortgage at a rate of 8.5% in 30 years? In 15 years? How much money do you end up paying in each? 2. Use the PV formula to determine how much you must pay each month to pay off a $10,000 car loan at a rate of 7.2% in 4 years. How much money will it cost you over the 4 years? 3. Use the FV formula to determine how much money will be in your IRA if you deposit $100 a month into an account at a rate of 3% after 10 years. How much money did you actually pay into the account?

11. PV cont… Suppose you take out a $90,000 mortgage for 20 years at 10%. A. Find the monthly payment B. If you made a monthly payment of $1000 instead, how long would it take you to pay off your loan. C. How much money would you save using B over A.

12. Cars http://automobiles.honda.com/accord- sedan/price.aspx http://automobiles.honda.com/accord- sedan/price.aspx https://www.ncsecu.org/Loans/NewVehicle.html 4.75% for up to 72 months (State Employees) http://beta.kbb.com/new-cars/ Car Insurance http://www.progressive.com/ How much? What’s covered?