**BUSN380 Week 4 TCO 5 Chap 13 Notes - Calculating Time Value of money & Rate of Return 2**

Calculating the Amount for an Emergency Fund. Beth and Bob Martin have a total take-home pay of $3,200 a month. Their monthly expenses total $2,800. Calculate the amount the couple needs to establish an emergency fund. How did you calculate this amount?

3. Determining Profit or Loss from an Investment. Three years ago, you purchased 150 shares of IBM stock for $88 a share. Today, you sold your IBM stock for $103 a share. For this problem, ignore commissions that would be charged to buy and sell your IBM shares.

a*.* What is the amount of profit you earned on each share of IBM stock?

b*. *What is the total amount of profit for your IBM investment?

4. Determining the Time Value of Money. Using Exhibit 13-1, complete the following table. Then

answer the questions that follow the table. Hint: To calculate the amount of interest, subtract the amount of your total investment from the value at the end of the time period.

**Category:**Business, General Business

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