INPUT DATA

Check book's information ATM's transactions

Check number Amount Status in BS Date

654 $206.05 Cleared 1-Nov
658 55.22 Outstanding 2-Nov
662 103.00 Cleared 6-Nov
668 99.00 Outstanding 14-Nov
670 6.10 Outstanding 21-Nov
671 50.25 Outstanding 24-Nov
672 24.90 Cleared 27-Nov
673 32.45 Outstanding 30-Nov
674 44.50 Cleared
675 30.00 Cleared
676 30.00 Cleared Bank statement's information
677 111.23 Cleared
678 38.04 Cleared Ending balance
679 97.99 Cleared Interest earned
680 486.70 Outstanding Check service charge
681 43.50 Cleared Return checks charge
682 75.00 Outstanding
683 98.50 Outstanding
Ending Balance 286.54

SOLUTION
CHECKING ACCOUNT RECONCILIATION
For the Month of November Year 2009
Accountholder Name (s) Jose Mendez
Type of Account NOW account - Second State Bank

1. Ending balance shown on the bank statement

Add up checks and withdrawals still oustanding: Check Number or

Check Number or Date Amount Date Amount
658 $55.22
668 99.00
670 6.10
671 50.25
673 32.45
680 486.70
682 75.00
683 98.50
24-Nov 150.00
 27-Nov 225.00

TOTAL $1,278.22

2. Deduct total checks/withdrawals still outstanding from bank balance

Add up deposits not shown on bank statement:

Date Amount Date Amount
21-Nov $525.60
30-Nov 400.00

TOTAL $925.60

3. Add total deposits still outstanding to bank balance

A. Adjusted Bank Balance (1 - 2 + 3)

4. Ending balance shown in check book

5. Deduct any bank service charges for the period

6. Add iterest earned for the period

B. New Checkbook Balance (4 - 5 + 6)

Note: Your account is reconciled when line A equals line B.

TM's transactions

Amount Transactions Status in BS

$50.00 Withdrawal Cleared
$525.60 Deposit Cleared
$100.00 Deposit Cleared
$75.00 Withdrawal Cleared
$525.60 Deposit Outstanding
$150.00 Withdrawal Outstanding
$225.00 Withdrawal Outstanding
$400.00 Deposit Outstanding

ank statement's information

ding balance $622.44

terest earned $3.28
heck service charge $8.00
turn checks charge $12.00

ON

$622.44

Amount
$1,278.22

$1,278.22

Amount

$925.60

$925.60

$269.82

$286.54

$20.00

$3.28

$269.82
 If you put $5,000 in a savings account that pays interest at the rate of 4%, compounded annually, how much
will you have in 5 years? (Hint: Use the future value formula.) How much interest will you earn during the 5
years? If you put $5,000 each year into a savings account that pays interest at the rate of 4% a year, how much
would you have after 5 years?

a. Time 0 1 2 3 4 5
Deposit $5,000
Interest income ????

Solution
PV $5,000
n 5
r 4.00%
FV $6,083.26
Interest ($) $1,083.26

b. Time 0 1 2 3 4 5
Deposits $5,000 $5,000 $5,000 $5,000 $5,000
Account balance ????

Solution
PV $0
n 5
r 4.00%
PMT $5,000
FV $27,082
ounded annually, how much
t will you earn during the 5
e rate of 4% a year, how much
INPUT DATA
Annual after-taxes income $62,000
Investment portfolio $133,000

SOLUTION
a. Monthly after-taxes income $5,167 (Annual after-taxes income/12 months)
Minimum liquidity reserves $15,500
Maximum liquidity reserves $31,000

b. Minimum portfolio value held $13,300

in savings and ST investments
Maximum portfolio value held $33,250
in savings and ST investments

c. Minimum total ST liquid assets $28,800

Maximum total ST liquid assets $64,250 However, the longer their investment time frame the
investments are needed in their investment portfolio,
with adequate liquid reserves as described in part a
heir investment time frame the less short-term
d in their investment portfolio, particularly
eserves as described in part a