| Course | MT421 Financial Planning |
|---|---|
| Unit | Unit 4 |
| Paper type | Time value of money problem set |
| Length | About 1,180 words, 7 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | BS in Business Administration |
| Updated | October 2026 |
Free sample paper for MT421 Unit 4
Six Questions Kayla Is Already Asking: An MT421 Unit 4 Time Value of Money Problem Set
[Student Name]
Purdue University Global
MT421: Financial Planning
Unit 4 Time Value Problem Set
[Instructor Name]
[Date]
Kayla Brooks and her balances are a composite carried from Units 2 and 3; every answer was computed and rechecked by an amortization schedule, and the sources cited are real.
Conventions Used Throughout
All rates are annual percentage rates converted to a monthly rate by dividing by 12, because every account in Kayla's finances compounds or bills monthly. Unless a problem states otherwise, each payment or deposit lands on the last day of its month, so the calculator stays in END mode. On a financial calculator, P/Y and C/Y are both set to 12; in a spreadsheet, the rate argument is the annual rate divided by 12 and the period count is in months. Intermediate results are carried at full precision and rounded only in the final answer, since rounding early creates small errors that grow across long schedules.
Problem 1: What Will Her Savings Be Worth in Three Years?
Kayla has $2,400 in a savings account paying 4.0 percent compounded monthly and wants to know its value in three years if she adds nothing. The inputs are a present value of $2,400, a monthly rate of 0.04 divided by 12, or 0.3333 percent, and 36 periods. The formula is FV = PV(1 + i)^n. The calculator entries are N = 36, I/Y = 4, PV = -2,400, PMT = 0, then compute FV. The answer is $2,705.45.
Interest alone adds about $305 over three years, which shows her that the savings account will not reach a down payment on its own; deposits have to do most of the work.
Problem 2: What Monthly Deposit Reaches $9,000 in Two Years?
Kayla wants $9,000 in savings within two years, roughly three months of essential spending. The inputs are the same $2,400 present value, the same monthly rate and 24 periods, with a future value of $9,000. Her existing balance grows to $2,599.54 by itself, so the deposits must supply the remaining $6,400.46. The formula for the deposit is PMT = (FV − PV(1 + i)^n) × i / ((1 + i)^n − 1). The calculator entries are N = 24, I/Y = 4, PV = -2,400, FV = 9,000, then compute PMT. The answer is a deposit of $256.60 a month.
That is slightly more than the $250 surplus her revised budget produced, so reaching this goal in two years would require the whole surplus and a little more, leaving nothing for faster debt payment. The goal and the debt plan compete for the same dollars.
Problem 3: When Will the Car Loan Be Paid Off?
Kayla's car loan has a balance of $11,300 at 7.4 percent, and she pays $318 a month. The question is how many payments remain and what they cost in interest. The inputs are a present value of $11,300, a payment of $318 and a monthly rate of 0.6167 percent. The formula is n = -ln(1 − iPV / PMT) / ln(1 + i). The calculator entries are I/Y = 7.4, PV = 11,300, PMT = -318, FV = 0, then compute N. The answer is 40.2 months: forty full payments and a small forty-first. An amortization schedule built row by row puts total interest at $1,494.52.
The loan ends about three and a half years from now, which matters for the Unit 5 plan, because the $318 freed then can be rolled into whatever debt remains.
Problem 4: What Does a Fixed $150 Card Payment Really Cost?
Kayla's Visa balance is $4,860, billed at 26.24 percent, and she has been paying a flat $150 a month, slightly above the minimum. The question is how long that takes and what it costs, compared with $400 a month. The inputs are a present value of $4,860, a monthly rate of 2.1867 percent and payments of $150 or $400. The formula is the same as in Problem 3. At $150, N comes to 57 months and total interest to $3,687.79. At $400, N comes to 14.3 months, fifteen payments in all, and total interest to $851.38.
Paying $250 more each month saves about $2,836 in interest and ends the debt three and a half years sooner.
Soll et al. (2013) report that card holders routinely underestimate how long a fixed small payment takes to clear a balance, and Stewart (2009) found that the minimum printed on a statement acts as an anchor that pulls people's chosen payments down, and Kayla's $150 is a case of it. The comparison makes the cost of that anchor visible in dollars.
Problem 5: How Much Must She Save Monthly to Buy in Five Years?
Kayla is thinking about a $229,000 condominium in five years. With 10 percent down and closing costs of about 3 percent, she would need $29,770 in cash at closing. If she saves in an account earning 4 percent compounded monthly, starting from zero, the question is the monthly deposit. The inputs are a future value of $29,770, a monthly rate of 0.3333 percent and 60 periods. The formula is PMT = FV × i / ((1 + i)^n − 1). The calculator entries are N = 60, I/Y = 4, PV = 0, FV = 29,770, then compute PMT. The answer is $449.03 a month.
The figure is almost double her current surplus, so buying in five years would require either a higher income, a smaller down payment with more mortgage insurance, or a longer horizon. Unit 7 will test whether buying is the right goal at all.
Problem 6: What Is the Unclaimed Employer Match Worth?
Kayla's employer matches 50 percent of her contributions up to 6 percent of pay. She contributes 4 percent, so the match is 2 percent of her $58,400 salary. Raising her contribution to 6 percent would add a match of 3 percent, an extra 1 percent of pay, or $584 this year. The question is what that unclaimed $584 a year would be worth at 67 if it grew with her salary at 3 percent a year and was invested for 38 years. Using a growing annuity computed year by year in a spreadsheet, the answer is about $96,700 at a 5 percent return and about $146,100 at 7 percent.
Choi et al. (2011) found that many employees who could withdraw their own contributions without penalty still left matching money unclaimed, which their title calls leaving bills on the sidewalk. Kayla's case is milder but the same in kind: the match is a 50 percent return on each added dollar before any market gain.
What the Set Shows Together
Read together, the six answers point to one priority. The card payment in Problem 4 and the match in Problem 6 offer the highest returns available to her, and both beat any savings rate in Problems 1, 2 and 5. The debt plan and the retirement increase should come first, with the savings goals paced to whatever remains.
References
Choi, J. J., Laibson, D., & Madrian, B. C. (2011). $100 bills on the sidewalk: Suboptimal investment in 401(k) plans. Review of Economics and Statistics, 93(3), 748-763. https://doi.org/10.1162/REST_a_00100
Soll, J. B., Keeney, R. L., & Larrick, R. P. (2013). Consumer misunderstanding of credit card use, payments, and debt: Causes and solutions. Journal of Public Policy & Marketing, 32(1), 66-81. https://doi.org/10.1509/jppm.11.061
Stewart, N. (2009). The cost of anchoring on credit-card minimum repayments. Psychological Science, 20(1), 39-41. https://doi.org/10.1111/j.1467-9280.2008.02255.x
Reading the MT 421 Unit 4 instructions
The fourth unit asks students to apply time value of money formulas to personal finance questions, often for a case client with goals. Instructors expect every problem to show its inputs: the rate converted to the compounding period, the number of periods, present value, payment, future value and whether payments come at the beginning or end of each period. Formula notation, calculator keystrokes and spreadsheet functions are usually all acceptable, as long as one is shown in full. Intermediate results should be carried at full precision. Each answer needs a sentence saying what it means for a decision. Problems copied from the textbook score less well than problems adapted to the case. Typical sets cover future value, a required deposit, loan payoff time, card payoff and retirement contributions.
How the MT 421 Unit 4 example is put together
A conventions section opens the sample, setting monthly rates, END mode and full-precision rounding once for all six problems. Each problem then follows the same pattern: the question in Kayla's words, the inputs, the formula, the calculator entries, the answer and its meaning. Problem two shows that saving $9,000 in two years would take slightly more than her whole surplus. Problem four sets the $150 and $400 card payments side by side under a highlighted line on the interest saved, citing Soll and colleagues and Stewart on how minimums anchor payments. Problem six values the forgone match year by year, with Choi and colleagues on unclaimed matches. A closing section ranks the six answers and puts the card and the match ahead of every savings goal.
MT421 Unit 4 rubric: what earns full points
Problem sets in this unit are usually graded on correct inputs, correct answers and interpretation. Answers with no inputs cannot be checked and often lose more credit than an arithmetic slip would. Rubrics commonly check that annual rates were converted to monthly ones and that the period count matches. Credit goes to stating payment timing, since an annuity answer is ambiguous without it. Carrying full precision avoids small errors that compound across long schedules. Interpretation sentences tied to the client's decisions earn the marks that separate a good set from a correct one. Ranking the answers by what they mean for the plan shows synthesis. Neat layout, consistent formatting and any cited sources in APA 7 complete the grade.
MT421 Unit 4 help from the desk
The most common weak set gives answers alone, so the grader cannot tell whether a wrong figure came from a wrong rate or a typing error. Another frequent mistake enters an annual rate against monthly periods, producing balances that grow absurdly fast. Students often forget to say whether payments come at the start or end of each month. Rounding the monthly rate to two decimal places early can move a long loan result by many dollars. Interpretation is the step most often skipped. Some sets solve generic textbook problems when the prompt supplies a person with goals. Before submitting, recompute one answer a second way, for example with a spreadsheet if you used a calculator. If the two disagree, check the rate per period first.
Get an MT421 Unit 4 example written to your instructions
Whichever problems your Unit 4 assignment sets, or whatever goals its case client holds, the first custom MT421 time value set is solved free: inputs first, each answer interpreted, in the calculator or spreadsheet method your instructor prefers. Expect it within 24-48h, with keystrokes for a named financial calculator model shown on request. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
More MT421 papers and BS in Business Administration samples
- MT421 Unit 1: Opportunity Cost Board Post
- MT421 Unit 2: Personal Budget Analysis
- MT421 Unit 3: Net Worth Statement
- MT421 Unit 5: Debt Repayment Plan
- MT421 Unit 6: Seminar Reflection
- MT421 Unit 7: Rent Versus Buy Analysis
- MT421 Unit 8: Income Tax Estimate
- MT421 Unit 9: Retirement Savings Projection
- MT421 Unit 10: Personal Financial Plan
- MT400 Unit 4: Handoff Analysis
- MT382 Unit 4: Exterior Wall Assemblies Estimate
- MT381 Unit 4: CPM Network Logic Diagram
MT421 Unit 4 questions, answered
Should I show formulas or calculator keystrokes?
Either, as long as the inputs are visible. Many instructors accept formula notation, financial calculator keystrokes or spreadsheet functions such as PMT and FV. What loses credit is a bare answer. Write the rate per period, number of periods, present value, payment, future value and timing, then show whichever method you used to solve.
Why does compounding frequency matter so much?
Because the rate and the number of periods must match. A loan quoted at 7.4 percent a year with monthly payments uses 7.4 divided by 12 per month and counts periods in months. Mixing an annual rate with monthly periods is one of the most common errors graders see, and it can distort answers badly.
How many decimal places should the answers carry?
Dollar answers round to the cent, and rates to at least four decimal places during calculation. Round only the final answer. Rounding a monthly rate to two places early can move a thirty-year result by hundreds of dollars. If your prompt specifies a rounding rule, follow it and say so.
Where can I find a free MT421 Unit 4 sample paper?
The complete MT421 Unit 4 problem set is on this page, with six time value problems solved from one Knoxville renter's savings, loans and match.
How much interest does a $400 payment save in the MT421 Unit 4 sample?
About $2,836 against a fixed $150 on the $4,860 Visa, and the balance is gone three and a half years sooner.