Personal Finance Final
If a $10,000 investment earns a 4 percent annual return, what should its value be after 1 year?
10,400
Financial experts recommend a debt/payments ratio of less than ____ of take-home pay.
20%
Given the following information, calculate the debt ratio percentage: Liabilities = $25,000Liquid assets = $5,000Monthly credit payments = $800Monthly savings = $760Net worth = $75,000 Take-home pay = $2,300Gross income = $3,500Monthly expenses = $2,050
33.33%
Common stock and bond brokerage statements are an example of a(n) ____________ record.
investment
Randy Hill wants to retire in 20 years with $1,000,000. If he can earn 10 percent per year on his investments, how much does he need to deposit each year to reach his goal?Use Exhibit 1-B. (Round your answer to the nearest dollar.)
$17,460
The goal of purchasing a long-term care insurance policy would be most appropriate for:
An older single person with children
If inflation is expected to be 8 percent, how long will it take for prices to double?
9 years (Rule of 72: 72/8 = 9 years)
The saving component of financial planning focuses on long-term security and includes:
A regular savings plan for emergencies
The problem of bankruptcy is associated with overuse and misuse of credit in the ______________ component of financial planning.
Borrowing
Future value computations are often referred to as:
Compounding
Present value computations are also referred to as:
Discounting
A formalized report that summarizes your current financial situation, analyzes your financial needs, and recommends future financial activities is a(n):
Financial plan.
Which of the following best describes the concept of the time value of money?
Increases in amounts of money as a result of interest earned
Changes in the cost of money is referred to as ____________ risk.
Interest rate
Increased consumer saving and investing is likely to be accompanied by:
Lower interest rates
Robert Brown is interested in attending a concert next weekend. Unfortunately, he is scheduled to work. If he finds a substitute for his shift so he can attend the concert, what kind of cost is he incurring?
Personal opportunity cost relating to time
A current ratio means:
___ of liquid assets are available for every ___ of current liabilities.
