(Note: You can use tables or a financial calculator. If you use a calculator, please provide the inputs you used to solve the problems.) (5 points each = total 20 points)

a. Starting with $20,000, how much will you have in 20 years if you can earn 5% on your money? b. If you inherited $100,000 today and invested all of it in a security that paid an 8% rate of return, how much would you have in 15 years? c. If the average new home costs $200,000 today, what will be the value in 10 years if inflation is 4% per year? d. If you can earn 9% per year, how much will you have to save each year if you want to retire in 40 years with $3 million? (Points : 20) Question 2. 2. (TCO A) Construct a balance sheet for the Smith family from the following information. Be sure the format is correct. (20 points for balance sheet) Are the Smiths solvent or insolvent? Explain. (5 points) Show all work. (25 points total for problem)

Cash on hand 100 Bank credit card balance1 5,000 Auto loan balance 25,000 Mortgage 225,000 Primary residence (FMV) 250,000 Jewelry 500 Stocks 1,000 Coin collection 1,500 2010 Toyota 25,000 (Points : 25) Question 3. 3. (TCO B) Part 1: The Smith family would like to itemize its deductions for the current tax year. The Smiths' adjusted gross income (AGI) is $85,000. Their filing status is Married Filing Jointly. Looking at the items below, which ones can they itemize, and what is the total they can take on their Schedule A itemized deductions? (30 points) Show all of your work to obtain full credit.

Part 2: Assuming that the Smiths' standard deduction would be $11,400 for this tax year and that they are in the 25% marginal federal income tax