Module 3 FPQP
A conservative rate of return. - answer When making rate of return assumptions for a
client's goal, a planner should use
inflation rates and rates of return - answer Because levels of return can fluctuate widely,
planners should be somewhat more conservative with the __________________
assumed during goal forecasting.
An assumption of a high rate of return will allow greater flexibility in achieving a
particular goal. - answerWhat effect does an assumption, regarding the rate of return,
have on achieving a goal?
fewer dollars will need to be invested. - answerAn assumption of a high rate of return
may indeed result in fewer dollars being invested to achieve a particular goal because
the high return means that_________________
an ordinary annuity. - answerThe future value of an annuity due will be greater than the
future value of_______
the money is invested earlier (at the beginning of the period rather than at the end of the
period). - answerThe future value of an annuity due will be greater than the future value
of an ordinary annuity because with an annuity due,____________
1 P/YR, end mode, C ALL. 10000 +/- PV, 9.5 I/YR, 5, downshift, N (5 compounding
periods), solve for FV = $15,742.39. - answerSteve invested $10,000 in a growth mutual
fund five years ago. He earned an average annual return of 9.5% on the fund during
that period. How much is his fund worth now?
1 P/YR, end mode, C ALL. 100000 FV, 7 I/YR, 12, downshift, N (12 compounding
periods), solve for PV = $44,401.20. - answerMary wants to accumulate $100,000 in 12
years. She believes she can earn 7%, compounded annually, on her money. How much
does she need to invest today to achieve her goal?
1 P/YR, end mode, C ALL. 5000 +/- PV, 25250 FV, 15, downshift, N (15 compounding
periods), solve for I/YR = 11.40%. - answerRhonda invested $5,000 in a mutual fund 15
years ago. It is now worth $25,250. What average annual rate of return did Rhonda earn
on this investment?
12 P/YR, end mode, C ALL. 20000 PV, 6 I/YR, 5, downshift, N (60 compounding
periods), solve for PMT = $386.66. - answerTammy wants to buy a new car and finance
$20,000 with a five-year loan at 6%. What would her monthly payments be?
A conservative rate of return. - answer When making rate of return assumptions for a
client's goal, a planner should use
inflation rates and rates of return - answer Because levels of return can fluctuate widely,
planners should be somewhat more conservative with the __________________
assumed during goal forecasting.
An assumption of a high rate of return will allow greater flexibility in achieving a
particular goal. - answerWhat effect does an assumption, regarding the rate of return,
have on achieving a goal?
fewer dollars will need to be invested. - answerAn assumption of a high rate of return
may indeed result in fewer dollars being invested to achieve a particular goal because
the high return means that_________________
an ordinary annuity. - answerThe future value of an annuity due will be greater than the
future value of_______
the money is invested earlier (at the beginning of the period rather than at the end of the
period). - answerThe future value of an annuity due will be greater than the future value
of an ordinary annuity because with an annuity due,____________
1 P/YR, end mode, C ALL. 10000 +/- PV, 9.5 I/YR, 5, downshift, N (5 compounding
periods), solve for FV = $15,742.39. - answerSteve invested $10,000 in a growth mutual
fund five years ago. He earned an average annual return of 9.5% on the fund during
that period. How much is his fund worth now?
1 P/YR, end mode, C ALL. 100000 FV, 7 I/YR, 12, downshift, N (12 compounding
periods), solve for PV = $44,401.20. - answerMary wants to accumulate $100,000 in 12
years. She believes she can earn 7%, compounded annually, on her money. How much
does she need to invest today to achieve her goal?
1 P/YR, end mode, C ALL. 5000 +/- PV, 25250 FV, 15, downshift, N (15 compounding
periods), solve for I/YR = 11.40%. - answerRhonda invested $5,000 in a mutual fund 15
years ago. It is now worth $25,250. What average annual rate of return did Rhonda earn
on this investment?
12 P/YR, end mode, C ALL. 20000 PV, 6 I/YR, 5, downshift, N (60 compounding
periods), solve for PMT = $386.66. - answerTammy wants to buy a new car and finance
$20,000 with a five-year loan at 6%. What would her monthly payments be?
