Exam 2: Using Financial Statements and Budgets

Elena purchased a stamp collection for $5,000 30 years ago. If its value appreciated at 8% annually, what is it worth today? (Round the answer to the nearest dollar.)

The Harts spend 30% of their disposable income on housing, 5% on medical expenses, 25% on food, 10% on clothing, 14% on loan repayments, and 8% on entertainment. How much of their disposable income is available for saving and investment? (Show all work.)

Phil has $2,000, and he needs it to grow to $4,000 in 8 years. Assuming he does not add any more money to this fund, what rate of interest would he need to earn? (Round the rate of interest to the nearest whole number.)

Financial planning is necessary only if an individual earns a lot of money.

Assume that your total income for the current year is $35,000. Your total expenses, including taxes of $5,000, are $30,000. Your savings ratio is:

Your _____ is an example of a liquid asset.

Knowing how to prepare and interpret personal financial statements is a cornerstone of personal financial planning.

_____ will be listed as a liability on your balance sheet.

A budget helps in:

A(n)______  is an example of a current liability. ​

The liquidity ratio is designed to show the percentage of ______  you can cover with your current assets.

Construct a balance sheet using the following information. Be sure the format is correct. (Show all work.)

Which of the following is an example of real property?

The total amount of salary you earn before taxes are deducted is your ______ salary .

Which of the following statements regarding an individual's net worth is true?

When Phil lists his house on his balance sheet, he should record its:

A cash surplus on an income and expense statement prepared on a cash basis indicates that:

Jamie wants to have $1,000,000 for her retirement in 25 years. How much should she save annually if she expects to earn 10% on her investments?

Theresa invested $5,000 in an account she expects will earn 7% annually. Approximately how many years will it take for the account to double in value? (Round the number of years to the nearest whole number.)

A ______  is an example of a liquid asset. ​