Aladin ?

Project 1:

Task 1: Monthly and Annual Budget

Monthly Net Salary: Br.9,500

Monthly Personal Expenditures:
- Cloth: 15% of salary = 0.15 * 9,500 = Br.1,425
- Food & Beverage: 20% of salary = 0.20 * 9,500 = Br.1,900
- Medical: 5% of salary = 0.05 * 9,500 = Br.475
- Rent: 20% of salary = 0.20 * 9,500 = Br.1,900
- Transport: 2% of salary = 0.02 * 9,500 = Br.190
- Education: 10% of salary = 0.10 * 9,500 = Br.950

Remaining amount for personal savings:
Total Expenditures = 1,425 + 1,900 + 475 + 1,900 + 190 + 950 = Br.6,840
Remaining Amount = Salary - Total Expenditures = 9,500 - 6,840 = Br.2,660

Annual Budget:
Total Expenditures = Monthly Expenditures * 12 = 6,840 * 12 = Br.82,080
Total Savings = Remaining Amount * 12 = 2,660 * 12 = Br.31,920

Task 2:

A. Amount of Loan from Addis Saving & Credit Association:
Capital for Barber Shop = Br.80,520
Amount Covered from Personal Savings = Remaining Amount = Br.2,660
Amount Covered from Loan = Capital - Amount Covered from Personal Savings = 80,520 - 2,660 = Br.77,860

B. Amount of Principal & Interest Repayment for the First Year:
Principal Amount = Loan Amount = Br.77,860
Interest Rate = 8.5% per annum
Interest for the First Year = Principal Amount * Interest Rate = 77,860 * 0.085 = Br.6,597.10
Total Repayment for the First Year = Principal Amount + Interest for the First Year = 77,860 + 6,597.10 = Br.84,457.10

C. Amount of Outstanding Principal Balance at the End of the Second Year:
Principal Amount = Loan Amount = Br.77,860
Principal Repayment per Semi-Annual Installment = Principal Amount / 6 = 77,860 / 6 = Br.12,976.67
Outstanding Principal Balance at the End of the Second Year = Principal Amount - 2 * Principal Repayment per Semi-Annual Installment = 77,860 - 2 * 12,976.67 = Br.51,906.66

Project 2:

A. Importance of Budgeting:
Budgeting is important because it helps individuals and businesses plan and manage their finances effectively. It allows for better control over spending, helps in setting financial goals, and ensures that income is allocated wisely.

B. Steps of Preparing Personal Budget and Savings Plan:
1. Determine your income: Calculate your monthly or annual income from all sources.
2. Track your expenses: Keep a record of all your expenses to understand where your money is going.
3. Categorize your expenses: Divide your expenses into different categories such as rent, food, transportation, etc.
4. Set financial goals: Determine your short-term and long-term financial goals, such as saving for a house or retirement.
5. Allocate funds: Allocate a portion of your income towards each expense category and savings.
6. Monitor and adjust: Regularly review your budget and make adjustments as needed to ensure you stay on track.

C. Importance of Setting Financial Goals:
Setting financial goals helps individuals prioritize their spending, save money, and work towards achieving their desired financial outcomes. It provides motivation, direction, and a sense of purpose in managing personal finances. Financial goals can include saving for emergencies, buying a house, paying off debt, or planning for retirement.

Project 1.
Ato Fantahun is a permanent employee of Ethio-constraction company earning monthly net salary of $Br .9,500$.

He has monthly personal expenditures as per the following details and the remaining amount will be deposited to his personal saving account.

Cloth $-15 \%$

Food \& Beverage $-20 \%$

Medical$-5 \%$

Rent$-20 \%$

Transport$-2 \%$

Education $-10 \%$

Ato Fantahun plans to open barber shop with a capital of $Br .80,520$ after one year. As per his business plan his capital is covered from his personal saving account \& the remaining from Addis saving \& credit association at $8.5 \%$ annual interest rate for three years \& the principal amount will be paid semi-annually at equal installment.

Task 1. Prepare monthly and annual budget for the year consider that there is no change in earning and expenditures.

Task 2. Determine;

Prepared by Kitata J.
A. The amount of loan from Addis saving \& credit association
B. The amount of principal \& interest repayment for the first year
C. Amount of outstanding principal balance at the end of the second year

Project 2.
Determine the following concepts:
A. The importance of budgeting
B. The steps of preparing personal budget and savings plan.
C. Importance of Setting Financial Goals

NB: please be understood the following messages!
- Show all necessary steps in your work.
- Eligible hand writing has its own value.
- After the date of submission, your work will not have acceptance.
- Submitting Date will be February 3/02/2023

Your assignment have a value of $30 \%$