<p>CHAPTER 13 FINANCIAL PLANNING PROBLEMS </p><p>1. 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 (assume a 3 month emergency fund). How did you calculate this amount? 2. 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. </p><p> a. What is the amount of profit you earned on each share of IBM stock?</p><p> b. What is the total amount of profit for your IBM investment?</p><p>3. Calculating Rate of Return. Assume that at the beginning of the year, you purchase an investment for $6,000 that pays $80 annual income. Also assume the investment’s value has increased to $6,900 by the end of the year.</p><p> a. What is the rate of return for this investment?</p><p>4. Determining Interest. Assume that you purchased a corporate bond with a face value of $1,000. The interest rate is 6 percent. What is the dollar amount of annual interest you will receive each year? </p>