Question 1

You can earn 10%.If you hope to accumulate $20,000 in 4 years,you must make annual investments (end of period)of $3,918.

Accepted Answer

A) True 
 B)False  False

Question 2

Unplanned for inflation makes it easier to reach our financial goals.

Accepted Answer

A) True 
 B)False  False

Question 3

At a 12% interest rate,$2,000 invested today will be worth approximately $8,000 in about 12 years.

Accepted Answer

A) True 
 B)False  True

Question 4

Discounting is the reverse process of compounding.

Accepted Answer

A) True 
 B)False

Question 5

The future value of $12,000 invested today at 6% interest compounded annually for 4 years is

Accepted Answer

A) $23,259. 
B) $15,150. 
C) $12,190. 
D) $9,505. 
A) $23,259. 
B) $15,150. 
C) $12,190. 
D) $9,505.

Question 6

The text discusses the topic of compounding over a large number of compounding periods.To illustrate,it shows that $1,000 invested at 8% for 40 years (annual compounding)grows to $21,724.But if you could earn 10% instead of 8%,you would earn ________ more at the end of 40 years.

Accepted Answer

A) $4,431 
B) 25 percent 
C) $23,535 
D) $1,250 
A) $4,431 
B) 25 percent 
C) $23,535 
D) $1,250

Question 7

Discounting is the process of reducing future values to present values.

Accepted Answer

A) True 
 B)False

Question 8

In goal planning,you generally match the savings vehicle to the time when the money is needed;for example,short-range goals are funded with low-risk investments.

Accepted Answer

A) True 
 B)False

Question 9

At any positive rate of interest,a future value will be greater than a present value.

Accepted Answer

A) True 
 B)False

Question 10

Compounding is the process of increasing present value to future values.

Accepted Answer

A) True 
 B)False

Question 11

If you wish to double your money in 6 years,you must earn an interest rate of about

Accepted Answer

A) 8%. 
B) 24%. 
C) 12%. 
D) 36%. 
A) 8%. 
B) 24%. 
C) 12%. 
D) 36%.

Question 12

You have just put $5,000 into an investment that offers a 10% annual yield,using a simple interest calculation.At the end of two years your interest earned will be

Accepted Answer

A) $500. 
B) $550. 
C) $1,000. 
D) $1,100. 
A) $500. 
B) $550. 
C) $1,000. 
D) $1,100.

Question 13

Generally speaking,planners can usually seek higher return investments to meet

Accepted Answer

A) short-term goals. 
B) long-term goals. 
C) goals of any term. 
D) dreams,but not goals. 
A) short-term goals. 
B) long-term goals. 
C) goals of any term. 
D) dreams,but not goals.

Question 14

If actual inflation rates exceed the rates assumed in our goal planning,the required annual savings amount can be reduced.

Accepted Answer

A) True 
 B)False

Question 15

You have just put $1,000 in an investment that offers a 12% annual yield,using a simple interest calculation.At the end of two years your interest earned will be

Accepted Answer

A) $120.00. 
B) $144.00. 
C) $240.00. 
D) $254.40. 
A) $120.00. 
B) $144.00. 
C) $240.00. 
D) $254.40.

Question 16

Highly volatile inflation rates and earning rates make goal planning a useless activity.

Accepted Answer

A) True 
 B)False

Question 17

You have just put $5,000 into an investment that offers a 10% annual yield,with interest compounded annually.Your total interest earned after two years will be

Accepted Answer

A) $550. 
B) $1,000. 
C) $1,050. 
D) $1,100. 
A) $550. 
B) $1,000. 
C) $1,050. 
D) $1,100.

Question 18

The future value of a $500 ordinary annuity received for three years is $________ ,assuming an investment rate of 10%:

Accepted Answer

A) 1,655.00 
B) 665.50 
C) 1,820.50 
D) 335.65 
A) 1,655.00 
B) 665.50 
C) 1,820.50 
D) 335.65

Question 19

With a 10% interest rate,the present value of $100 received one year from today is $90.91.

Accepted Answer

A) True 
 B)False

Question 20

$500 invested at 8% at the beginning of each of the next four years will grow to approximately $2,433.

Accepted Answer

A) True 
 B)False

You can earn 10%.If you hope to accumulate $20,000 in 4 years,you must make annual investments (end of period)of $3,918.

Unplanned for inflation makes it easier to reach our financial goals.

At a 12% interest rate,$2,000 invested today will be worth approximately $8,000 in about 12 years.

Discounting is the reverse process of compounding.

The future value of $12,000 invested today at 6% interest compounded annually for 4 years is

The text discusses the topic of compounding over a large number of compounding periods.To illustrate,it shows that $1,000 invested at 8% for 40 years (annual compounding)grows to $21,724.But if you could earn 10% instead of 8%,you would earn ________ more at the end of 40 years.

Discounting is the process of reducing future values to present values.

In goal planning,you generally match the savings vehicle to the time when the money is needed;for example,short-range goals are funded with low-risk investments.

At any positive rate of interest,a future value will be greater than a present value.

Compounding is the process of increasing present value to future values.

If you wish to double your money in 6 years,you must earn an interest rate of about

You have just put $5,000 into an investment that offers a 10% annual yield,using a simple interest calculation.At the end of two years your interest earned will be

Generally speaking,planners can usually seek higher return investments to meet

If actual inflation rates exceed the rates assumed in our goal planning,the required annual savings amount can be reduced.

You have just put $1,000 in an investment that offers a 12% annual yield,using a simple interest calculation.At the end of two years your interest earned will be

Highly volatile inflation rates and earning rates make goal planning a useless activity.

You have just put $5,000 into an investment that offers a 10% annual yield,with interest compounded annually.Your total interest earned after two years will be

The future value of a $500 ordinary annuity received for three years is $________ ,assuming an investment rate of 10%:

With a 10% interest rate,the present value of $100 received one year from today is $90.91.

$500 invested at 8% at the beginning of each of the next four years will grow to approximately $2,433.

Financial Planning: Why Its Important to You

Financial Statement and Budgets: Where Are You Now and Where Are You Going

Taxes: the Governments Share of Your Rewards

Liquidity Management: Managing Current Assets and Current Liabilities

Short-Term Credit Management: Consumer Credit

Consumer Durables: the Personal Auto

Housing: the Cost of Shelter

Financial Markets and Instruments: Learning the Investment Environment

Investment Basics: Understanding Risk and Return

Stocks and Bonds: Your Most Common Investments

Mutual Fundsother Pooling Arrangements: Simplifying, Maybe Improving Investment Performance

Property and Liability Insurance: Protecting Your Lifestyle Assets

Health Care and Disability Insurance: Protecting Your Earning Capacity

Life Insurance and Estate Planning: Protecting Your Dependents

Retirement Planning: Planning for Your Long-Term Needs

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Exam 2: The Time Value of Money: All Dollars Are Not Created Equal

You can earn 10%.If you hope to accumulate $20,000 in 4 years,you must make annual investments (end of period)of $3,918.

Unplanned for inflation makes it easier to reach our financial goals.

At a 12% interest rate,$2,000 invested today will be worth approximately $8,000 in about 12 years.

Discounting is the reverse process of compounding.

The future value of $12,000 invested today at 6% interest compounded annually for 4 years is

The text discusses the topic of compounding over a large number of compounding periods.To illustrate,it shows that $1,000 invested at 8% for 40 years (annual compounding)grows to $21,724.But if you could earn 10% instead of 8%,you would earn ________ more at the end of 40 years.

Discounting is the process of reducing future values to present values.

In goal planning,you generally match the savings vehicle to the time when the money is needed;for example,short-range goals are funded with low-risk investments.

At any positive rate of interest,a future value will be greater than a present value.

Compounding is the process of increasing present value to future values.

If you wish to double your money in 6 years,you must earn an interest rate of about

You have just put $5,000 into an investment that offers a 10% annual yield,using a simple interest calculation.At the end of two years your interest earned will be

Generally speaking,planners can usually seek higher return investments to meet

If actual inflation rates exceed the rates assumed in our goal planning,the required annual savings amount can be reduced.

You have just put $1,000 in an investment that offers a 12% annual yield,using a simple interest calculation.At the end of two years your interest earned will be

Highly volatile inflation rates and earning rates make goal planning a useless activity.

You have just put $5,000 into an investment that offers a 10% annual yield,with interest compounded annually.Your total interest earned after two years will be

The future value of a $500 ordinary annuity received for three years is $________ ,assuming an investment rate of 10%:

With a 10% interest rate,the present value of $100 received one year from today is $90.91.

$500 invested at 8% at the beginning of each of the next four years will grow to approximately $2,433.

Financial Planning: Why Its Important to You

Financial Statement and Budgets: Where Are You Now and Where Are You Going

Taxes: the Governments Share of Your Rewards

Liquidity Management: Managing Current Assets and Current Liabilities

Short-Term Credit Management: Consumer Credit

Consumer Durables: the Personal Auto

Housing: the Cost of Shelter

Financial Markets and Instruments: Learning the Investment Environment

Investment Basics: Understanding Risk and Return

Stocks and Bonds: Your Most Common Investments

Mutual Fundsother Pooling Arrangements: Simplifying, Maybe Improving Investment Performance

Property and Liability Insurance: Protecting Your Lifestyle Assets

Health Care and Disability Insurance: Protecting Your Earning Capacity

Life Insurance and Estate Planning: Protecting Your Dependents

Retirement Planning: Planning for Your Long-Term Needs

Filters