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"Education is the most powerful weapon which you can use to change the world”
– Nelson Mandela

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Unit 1 Challenges 2

Unit 1 Challenges 2

Q 1. Which of the following actions will help Andrea stay productive toward her short-term and long-term financial goals? 2. When you obtain a bank loan and make periodic repayments, a large percentage of each repayment amount is used to pay back the amount you originally borrowed. 3. Jose wants to know the amount he should invest immediately if he wants to have $3,000 at the end of 2 years at 4% interest every year. Which type of TVM calculation should Jose use to find the amount? 4. Rockie needs $5,000 to pay for a certification program. How much money should Rockie invest today at an interest rate of 5.5% to receive $5,000 at the end of 3 years? 5. Alice pays a monthly rent of $1,200 for an apartment. She bought a new car which is an asset worth $20,000, but she still owes $15,000 on her car loan. Since Alice is just starting out in her career, she has $600 in her 401(k) and $1,950 in her savings account. She has a student loan of $50,000. She has $4,000 in credit card debt. Using the given information, calculate Alice's net worth. 6. How can you use your problem-solving skills to find a long-term solution when a financial crisis arises?

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1. Establishing a clear financial plan and making required changes to it based on shifting circumstances or priorities helps us stay productive toward our financial goals. 2. Monthly loan repayments include principal and interest. A large percentage of the loan repayment amount is used to pay back the originally borrowed amount and is known as the principal. The remaining portion is paid as interest.