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Personal Finance Toolkit

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Personal Finance Toolkit Powered By Docstoc
					CONTENTS QUICK LINKS
Future Value Present Value Loan Calculator Investment Goal Net Present Value Retirement Diversification Table Debt vs Investment Credit Cards

Future Value Calculator
Assumes Investments Occur at Beginning of Period One-Time Investment One-Time Investment Annual Interest Rate Compoundings per Year Number of Years Marginal Tax Rate $1,000 4.00% 1 5 0.00% 0.04 After-Tax Future Value $1,217

Periodic (Constant) Investments Periodic Investment Annual Interest Rate Number of Periods per Year Number of Years Marginal Tax Rate $1,000 /period 1.00% 1 5 0.00% 0.01 After-tax Future Value $5,152

Present Value Calculator
Assumes You Receive Funds at the End of the Period One-Time Investment Amount to be Received Opportunity Cost of Capital Compoundings per Year Number of Years Marginal Tax Rate $20,000 8.00% /year 1 5 0.00% 0.08 After-Tax Present Value $13,612

Periodic (Constant) Investments Periodic Investment Opportunity Cost of Capital Number of Periods per Year Number of Years Marginal Tax Rate $10,000 /period 7.00% /year 1 30 28.00% 0.0504 After-tax Present Value $153,026

Loan Calculator

Loan Calculator
To Calculate Periodic Payments:
Amount Borrowed (Principal) Annual Interest Rate Term (Years) Payments per Year Periodic Payment $200,000 9.00% 20 years 1 payments per year $21,909.30 per period

To Calculate Maximum Loan Possible:
Annual Interest Rate Term (Years) Payments per Year Periodic Payment (Based on Cash Flow) Maximum Loan Possible - Based on Cash Flow Gross Annual Non-farm Income + Net Farm Income Current Loan Payments per Year Maximum Debt Payments/Income Ratio Maximum Loan Possible - Based on Debt Load 8.50% 20 years 12 payments per year $1,200 per period $138,277 $55,000 per year $10,000 25% $35,488

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Credit Card Estimator
Credit Card Information: Outstanding Balance Annual Interest Rate on Credit Card Minimum Monthly Payment - greater of Your First Monthly Payment will be Credit Card Repayment Facts: Number of Years to Pay Total Interest Paid Your Average Monthly Payment will be 22.92 Years $4,070 $22.07 per month $2,000 18.00% or 2.0% or $40.00

1.50% per month $15 per month

Investment of the Exact Same Minimum Monthly Payment for Same Time Period: Annual Rate of Return on Investment At Payoff, Investment would be worth
Assumes 1 month grace period on initial balance

10% annually $28,426 vs. paying off

$2,000 of debt!

Investment Goal Worksheet
Personal Information: Funds Needed (Investment Goal) Years until Funds are needed Average Annual Inflation Rate Average Nominal Rate of Return on Investment Your Marginal Tax Rate: Your Current Annual Income Value of Current Savings Future Value of Current Savings Additional Savings Needed to Reach Goal Annual Savings Needed to Reach Goal - Constant annual payment or - Payment grows at rate of inflation Annual Payment as a Percent of Annual Income: - Constant annual payment - Payment grows at rate of inflation $20,000 5 years 2.50% 8.00% 15.00% $30,000 /year $0 $0 $20,000 $3,492 /year $3,332 12% 11%

Net Present Value Analyzer
Desired Rate of Return Net Present Value (NPV) Profiability Index Amortized NPV Internal Rate of Return (IRR) Option 1 $45,783 0.23 $7,451 15.10% Option 1 Year 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Sum Net Cash Flow ($200,000) $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Present Value ($200,000) $36,364 $33,058 $30,053 $27,321 $24,837 $22,579 $20,526 $18,660 $16,964 $15,422 10.00% /year Option 2 $2,113 0.18 $667 16.73% Option 2 Net Cash Flow ($12,000) $3,375 $3,375 $3,375 $8,375 Present Value ($12,000) $3,068 $2,789 $2,536 $5,720

$45,783

$2,113

Diversification Table
Investment per year Single Investment Average Rate of Return Investment Portfolio Average Rates of Return: Investment A Investment B Investment C Investment D Investment E Simple Average Annual Return for Portfolio $10,000 /year 8%

(100%) 0% 5% 10% 20% (13%)

The Portfolio value will exceed the Single Investment Value in 13 years. Single Investment Value $232,149 Portfolio Value $233,539

Personal Retirement Calculator
Personal Information:
Years Until Retirement Years In Retirement Average Nominal Inflation Rate Average Nominal Rate of Return on Investments Current Annual Income 40 20 4 8 $30,000 years years % annually % annually

Nominal
1. 2. 3. 4. Annual Retirement Income Desired (current dollars) Expected Annual Social Security Benefits (current dollars) Expected Annual Pension Income (current dollars) Expected Annual Income From Lease of Business Assets or Continued Withdrawal from the Operation $30,000 $0 $0 $0 $30,000 $144,031 $1,957,423 $0 $0 $0 $0 $0 $0 $1,957,423 $7,556 25%

Real
$30,000 $0 $0 $0 $30,000 -------$407,710 $0 $0 $0 $0 $0 $0 $407,710 $4,291 14%

5. Expected Retirement Income Needed From Savings 6. Expected Future Value of Additional Income Needed 7. Expected Amount Needed at Retirement to Generate Additional Income 8. Current Value of Retirement Savings One-Half of Current Value of Home Equity One-Half of Current Value of Business Equity 9. Expected Future Value of Current Savings Expected Future Value of Home Equity Expected Future Value of Business Equity 10. Expected Total Retirement Capital You Need to Accumulate 11. Expected Annual Investment Needed to Reach Your Retirement Goal Percent of Current Income Nominal: Real: $7,556 is the annual contribution you need to make to reach your retirement goals.

$4,291 is the first contribution you need to make. Each year afterwards, your annual contribution must increase by the rate of inflation.

Invest vs. Paying Down Debt
Financial Information
Extra Cash Available for 1 Time Use Extra Cash Available Per Period $500 $100 $50,000 $35,000 5 12% 12 $1,112.22 15% 10.00% 14.12% Pay Debt, then Invest 2.8 years $6,349 $952

Loan Information:
Original Loan Amount Current Loan Balance Term (years) Interest Rate on Loan Payments/Year Scheduled Periodic Payment Marginal Tax Rate Interest Rate on Investment Breakeven Rate of Return on Investment

Invest while Paying Debt Time to Repay Debt Total Interest Paid Total Potential Tax Savings Investment Acct. Balance 3.2 years $7,238 $1,086 $4,862

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$5,175


				
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