F = P(1 + i)
= FV (1, N, O, P)
S
I
N
G
L
E
N
Compound
Amount
(F/P, 1, 1)
Present
Worth
(P/F, 1, )
Compound
Amount
(F/A,1,N)
P = F(1 + i)-N
= pv(i,N, 0,F)
[(1 + i)
F = A
[a + ]
= FV (1,N,A)
01 2 3 N-11
N
Y
Α Α Α AA
P
Sinking
fund
(A/F, 1,N)
A = F
L(1 + i)N
N-]
PMT (1, N, 0,F)
A
Y
M
E
N
T
Present
worth
(P/A, 1, N)
(1 + 1 - 1
P=A
i(1 + i)
= PV (1, N, A)
AAA
AA
1 2 3 N-IN
P
S
E
R
I
E
S
i(1 + i)
A =P
L(1 + -1
= PMT (i, N, P)
Capital
recovery
(A/P, 1, N)
Linear
gradient
(N-2)G
G
R
A
D
I
E
N
T
p=o[+baan
[(1 + N - iN - 1]
if(1 + i)
2G
1 2 3 N-1
VP
Present
worth
(P/G, i, N)
Equal-payment
Conversion factor
(A/G, i, N)
Geometric
gradient
1 = 0[4iti ypating
i[(1 + 0 - 1]
A (1+g)-1
- (1 + 8) (1 + 0-9
S
E
R
1
E
S
P=
trong
| 1 (1+) ar
12
Present
worth
(P/A, 8.1,N)
N
(if i = 8)
You decide to move across country and pursue your dream as an actor/actress. You currently live in
Washington, D.C. and you are looking to live within the Los Angeles city limits once you arrive in
California. You drive a 2005 Mini Cooper S and it is paid for. You are 24 years old and your father
currently pays for your car insurance, cellular phone, and health insurance. Your father has agreed to
maintain your health insurance and car insurance until age 26. Once you turn 26, however, you will have
to pay for your car insurance, cellular phone, health insurance, rent, and utilities (gas, water, and
electric). At age 26, health insurance will cost $325/month to maintain and will increase 1.5% each year.
You currently have $5000 in your savings account, which draws 1.5% interest annually. You have $2200
in your checking account, which earns 1% annually (both accounts are compounded monthly). You have
decided to give it 5 years to make your life in the big city. If you do not receive a starring role by then,
you are pointing your car east and returning home. You are able to rent a one bedroom apartment for
$1200/month, but it requires the first and last month's rent as the deposit. There is a 5% fee to turn on
each utility. You spend $200/month on groceries and $100/month on entertainment. You decided that
you needed flexible hours to pursue your dream, so you have taken a job as a server and a job as a
fitness/dance instructor at the local spa. The server job pays $800/week and normally you earn 12% in
tips. The fitness/dance instructor pays $40/class, and you normally teach 2 classes per week. You decide
to use your credit card while traveling across country so that you would have cash for all your deposits
once you arrived in L.A. You charged $1300 getting out to L.A. and since you are young, the credit card
APR is 15%. Your waitressing job is 15 miles away from where you live and the fitness/dance job is 20
miles away. Your Mini Cooper S gets 30 miles to the gallon and has an 11.4 gallon tank. It requires an oil
change every 5000 miles that costs $100 dollars. Routine maintenance on a Mini Cooper S runs about
$1300 annually.
How much will you have to return home if you stay all 5 years in L.A.?
Do you make enough to stay in L.A.?
How much will you need to make to stay in L.A.?
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