The Personal Finance Calculator How to Calculate the Most Important Financial Decisions in Your Life

by Faerber, Esme

• ISBN13: 9780071393904
• ISBN10: 0071393900
• Edition: 1st
• Format: Paperback
• Copyright: 2003-04-01
• Publisher: McGraw-Hill Education

Summary

Today's most clear-cut guide for understanding and making everyday financial decisionsIs it better to buy or lease a car? How does one calculate an investment return? For that matter, what exactly is an investment return?The Personal Finance Calculatorprovides noncomplex tools and calculations for assessing current personal wealth, determining how much debt is too much debt, understanding credit card interest rates, and more.Written by Esme Faerber, a McGraw-Hill author renowned for simplifying complex finance topics and explaining their use, this clear, concise book explains simple steps for getting one's financial life in order and saving money over both the short and long term. Readers will learn how to: Keep investment costs from undercutting overall returns Use the popular "Rule of 72" to estimate investment growth Determine how much money they will need for retirement

Author Biography

Esme Faerber, C.P.A. is professor of business and accounting at Rosemont College. She is the author of numerous popular books for individual investors, including All About Stocks and All About Bonds, and Bond Mutual Funds.

Table of Contents

Acknowledgments	vii
Introduction	ix
PART ONE Assessing Your Current Wealth
Financial Calculator:
How to Determine Your Net Worth	3	(5)
How to Determine a Cash Inflows and Outflows Statement	8	(4)
How to Formulate a Budget	12	(8)
Time Value of Money and What It Can Do for You	20	(2)
Simple Interest and How to Calculate It	22	(1)
Compound Interest and How to Determine Future Value	23	(7)
What You Need to Know About Nominal Versus Effective Interest Rates and How to Calculate the Effective Rate	30	(3)
Present Value and How to Calculate It	33	(4)
Annuities and How to Calculate Them	37	(15)
How to Determine the Amounts Needed to Fund Your Objectives	52	(9)
How to Reconcile Your Checking Account	61	(7)
How to Prepare Your Records for Your Tax Accountant	68	(7)
PART TWO Managing Your Personal Wealth-Debt
Financial Calculator:
Determine Your Debt Capacity	75	(2)
How to Determine the Best Source of Credit	77	(4)
How to Determine the Annual Percentage Rate Costs of Using Credit Loans	81	(9)
How to Determine the Rate of Interest on Your Credit Cards	90	(4)
How to Manage Your Debt	94	(5)
How Much of a Mortgage Can You Afford?	99	(4)
How to Calculate Your Monthly Mortgage Payment	103	(4)
How to Determine Your Mortgage Balance	107	(4)
Determine Your Mortgage Balance When Additional Principal Payments Are Made	111	(3)
Adjustable Rate Mortgages and How They Work	114	(7)
Which Type of Mortgage Should You Choose?	121	(4)
When Should You Refinance Your Mortgage?	125	(2)
Should You Rent or Buy a House?	127	(4)
What You Should Know About Leasing a Car and How a Lease Works	131	(5)
Should You Buy, Lease, or Finance Your Car?	136	(6)
How to Create a Simple Interest Loan Schedule	142	(7)
PART THREE Managing Your Personal Wealth--Investments
Financial Calculator:
Determine Your Investment Objectives	149	(3)
Determine Your Risk Tolerance	152	(6)
How to Allocate Your Investments	158	(7)
How to Determine Your Equity Style in the Selection of Individual Stocks	165	(6)
How to Determine Which Types of Bonds to Buy for a Portfolio	171	(4)
How to Rebalance Your Portfolio	175	(4)
The Rule of 72 and How to Use It to Determine How Long It Will Take to Double Your Money	179	(1)
How to Assess and Balance Risk and Return in the Choice of Different Investments	180	(6)
How to Calculate a Simple Rate of Return for Stocks and Bonds	186	(4)
How to Determine a Rate of Return for a Mutual Fund	190	(3)
How to Determine the Yield on Treasury Bills	193	(4)
How to Determine the Purchase and Selling Price of Treasury Bills	197	(4)
How to Buy and Sell Treasury Securities Directly from the Federal Reserve	201	(6)
How to Convert Municipal Bond Yields to Before-Tax Yields	207	(4)
Duration and How It Can Help You in the Choice of Bonds for Your Portfolio	211	(6)
How to Value Bonds	217	(3)
How to Value Common Stock	220	(6)
How to Determine the Growth Rate of a Stock	226	(3)
How to Analyze and Evaluate Your Common Stocks	229	(17)
How to Choose a Mutual Fund	246	(8)
How to Determine the Tax Consequences of Buying and Selling Shares in a Mutual Fund	254	(5)
How to Determine the Average Cost in Dollar Cost Averaging	259	(6)
PART FOUR Planning for Your Future
Financial Calculator:
How to Determine Your Future Financial Needs and How to Fund Them	265	(7)
How to Determine How Long Your Money Will Last in Retirement and the Amount of the Payment in a Systematic Withdrawal Plan	272	(5)
Appendices	277	(10)
Index	287