MCS 2100 EXAM REVIEW | QUESTIONS AND ANSWERS
| 2026 UPDATE | RATED 100% CORRECT.
annuity Answer - payment received every year
adult life cycle Answer - the stages in the family situation and financial needs
of an adult
Bankruptcy Answer - A legal process to get out of debt when you can no longer
make all your required payments
Compounding Answer - the process of accumulating interest on an investment
over time to earn more interest
financial plan Answer - A set of goals for spending, saving, and investing the
money you receive.
Future Value (FV) Answer - FV = PV(1+i)^n
n = number of time periods
i = interest rate
Future Value (FV) - more than once a year Answer - FV = PV(1+i/m)^nm
,m = number of compounding periods per year
future value of an annuity Answer - FV = [ (1+i)^n -1 / i ]
Inflation Answer - A general and progressive increase in prices
Life Cycle Approach Answer - our financial goals/risk expsoure change as we go
through different stages of life
Liquidity Answer - the ease with which an asset can be converted into the
economy's medium of exchange
opportunity cost Answer - the loss of potential gain from other alternatives
when one alternative is chosen.
personal financial planning Answer - Personal financial planning involves the
following process:
(1) determine your current financial situation;
(2) develop financial goals; (3) identify alternative courses of action;
(4) evaluate alternatives; (5) create and
implement a financial action plan; and
(6) re-evaluate and revise the financial plan.
Present Value (PV) Answer - PV = FV / (1 + I)^n
Present Value of an annuity Answer - PV = [ 1-[1/(1+i)^n] / i]
, simple interest Answer - I = P x R x T
P = amount in savings
R = annual interest rate
T = time period
time value of money Answer - the principle that a dollar received today is
worth more than a dollar received in the future
Assets Answer - property owned by a person or company, regarded as having
value and available to meet debts, commitments, or legacies.
budget Answer - an estimate of income and expenditure for a set period of
time.
budget deficit Answer - spending more money than your income
budget surplus Answer - income exceeds expenditures
cash flow Answer - the total amount of money being transferred into and out
of a business, especially as affecting liquidity.
Cash Flow Statement Answer - A summary that shows total income and
spending for a given time period
Current Liabilities Answer - liabilities due within a short time, usually within a
year
| 2026 UPDATE | RATED 100% CORRECT.
annuity Answer - payment received every year
adult life cycle Answer - the stages in the family situation and financial needs
of an adult
Bankruptcy Answer - A legal process to get out of debt when you can no longer
make all your required payments
Compounding Answer - the process of accumulating interest on an investment
over time to earn more interest
financial plan Answer - A set of goals for spending, saving, and investing the
money you receive.
Future Value (FV) Answer - FV = PV(1+i)^n
n = number of time periods
i = interest rate
Future Value (FV) - more than once a year Answer - FV = PV(1+i/m)^nm
,m = number of compounding periods per year
future value of an annuity Answer - FV = [ (1+i)^n -1 / i ]
Inflation Answer - A general and progressive increase in prices
Life Cycle Approach Answer - our financial goals/risk expsoure change as we go
through different stages of life
Liquidity Answer - the ease with which an asset can be converted into the
economy's medium of exchange
opportunity cost Answer - the loss of potential gain from other alternatives
when one alternative is chosen.
personal financial planning Answer - Personal financial planning involves the
following process:
(1) determine your current financial situation;
(2) develop financial goals; (3) identify alternative courses of action;
(4) evaluate alternatives; (5) create and
implement a financial action plan; and
(6) re-evaluate and revise the financial plan.
Present Value (PV) Answer - PV = FV / (1 + I)^n
Present Value of an annuity Answer - PV = [ 1-[1/(1+i)^n] / i]
, simple interest Answer - I = P x R x T
P = amount in savings
R = annual interest rate
T = time period
time value of money Answer - the principle that a dollar received today is
worth more than a dollar received in the future
Assets Answer - property owned by a person or company, regarded as having
value and available to meet debts, commitments, or legacies.
budget Answer - an estimate of income and expenditure for a set period of
time.
budget deficit Answer - spending more money than your income
budget surplus Answer - income exceeds expenditures
cash flow Answer - the total amount of money being transferred into and out
of a business, especially as affecting liquidity.
Cash Flow Statement Answer - A summary that shows total income and
spending for a given time period
Current Liabilities Answer - liabilities due within a short time, usually within a
year
