FHCE 3200 LATEST 2026 EXAM QUESTIONS AND
SOLUTIONS RATED A+
✔✔Present Value - ✔✔The current value of a future amount
✔✔Annuity - ✔✔A series of equal regular deposits
✔✔Rule of 72 - ✔✔The number of years it takes for a certain amount to double in value
is equal to 72 divided by its annual rate of interest
✔✔Amortized Payments - ✔✔Payment of the same amount for a set number of months
or years
✔✔Net Worth - ✔✔Assets minus liabilities
✔✔Liquidity - ✔✔The ease with which an asset can be converted into the economy's
medium of exchange
✔✔Fair Market Value - ✔✔The price a willing buyer would pay a willing seller in a free
market
✔✔Appreciating Assets - ✔✔Assets that increase in value over time, for example, a
house
✔✔Depreciating Assets - ✔✔Assets that usually decrease in value over their lifetime
✔✔Short-term Liabilities - ✔✔Must be paid off soon, usually within a year or less
✔✔Long-term Liabilities - ✔✔Liabilities owed for more than a year
✔✔Good Debt - ✔✔The concept that sometimes it is worth taking on certain types of
debt in order to generate income in the long run
✔✔Bad Debt - ✔✔Borrow money to buy something that either goes down in value
quickly or is consumed immediately
✔✔Current Ratio - ✔✔Current assets divided by current liabilities
✔✔Debt Ratio - ✔✔Total Debt/Total Assets
Should be less than 40%
✔✔Income - ✔✔All resources that can be spent or saved, such as wages or salaries,
interest earned at a bank or credit union, and allowances
, ✔✔Expenses - ✔✔The money spent on something
✔✔Surplus - ✔✔Planned well
Extra money
✔✔Deficit - ✔✔Expenses exceeds income
✔✔Savings Ratio - ✔✔The percentage of money that you are setting aside on a regular
basis
12%
✔✔Targeted Savings Ratio - ✔✔Savings ratio over a specific time period
< 30, your target should be to save 12% toward retirement
30-40, your target savings rate should be at least 15%
> 40, you will need a target retirement savings rate of 20% per year for each year until
age 65
✔✔Emergency Fund Ratio - ✔✔Whether you have sufficient resources available in case
of an emergency
Enough for 3-6 months
✔✔Consumer Debt-to-Income Ratio - ✔✔Indicates what percentage of your income you
are using to pay debt payments
Total Consumer Debt Payments/Total Income
Less than 15%
✔✔Total Debt-to-Income Ratio - ✔✔Indicates what percentage of your income you are
using to pay all of your debts
Total Debt Payments/Total Income
Less than 36%
✔✔Payroll Deduction - ✔✔Amounts subtracted from gross income that is withheld by an
employer for items like taxes and employee benefits.
✔✔Save More Tomorrow - ✔✔Commit to putting half of every future raise towards your
saving
✔✔Earnings - ✔✔Just one form of income
✔✔Wage - ✔✔An amount of money paid to an employee at a specific rate per hour
worked.
✔✔Salary - ✔✔A fixed amount of money paid to an employee for each pay period.
SOLUTIONS RATED A+
✔✔Present Value - ✔✔The current value of a future amount
✔✔Annuity - ✔✔A series of equal regular deposits
✔✔Rule of 72 - ✔✔The number of years it takes for a certain amount to double in value
is equal to 72 divided by its annual rate of interest
✔✔Amortized Payments - ✔✔Payment of the same amount for a set number of months
or years
✔✔Net Worth - ✔✔Assets minus liabilities
✔✔Liquidity - ✔✔The ease with which an asset can be converted into the economy's
medium of exchange
✔✔Fair Market Value - ✔✔The price a willing buyer would pay a willing seller in a free
market
✔✔Appreciating Assets - ✔✔Assets that increase in value over time, for example, a
house
✔✔Depreciating Assets - ✔✔Assets that usually decrease in value over their lifetime
✔✔Short-term Liabilities - ✔✔Must be paid off soon, usually within a year or less
✔✔Long-term Liabilities - ✔✔Liabilities owed for more than a year
✔✔Good Debt - ✔✔The concept that sometimes it is worth taking on certain types of
debt in order to generate income in the long run
✔✔Bad Debt - ✔✔Borrow money to buy something that either goes down in value
quickly or is consumed immediately
✔✔Current Ratio - ✔✔Current assets divided by current liabilities
✔✔Debt Ratio - ✔✔Total Debt/Total Assets
Should be less than 40%
✔✔Income - ✔✔All resources that can be spent or saved, such as wages or salaries,
interest earned at a bank or credit union, and allowances
, ✔✔Expenses - ✔✔The money spent on something
✔✔Surplus - ✔✔Planned well
Extra money
✔✔Deficit - ✔✔Expenses exceeds income
✔✔Savings Ratio - ✔✔The percentage of money that you are setting aside on a regular
basis
12%
✔✔Targeted Savings Ratio - ✔✔Savings ratio over a specific time period
< 30, your target should be to save 12% toward retirement
30-40, your target savings rate should be at least 15%
> 40, you will need a target retirement savings rate of 20% per year for each year until
age 65
✔✔Emergency Fund Ratio - ✔✔Whether you have sufficient resources available in case
of an emergency
Enough for 3-6 months
✔✔Consumer Debt-to-Income Ratio - ✔✔Indicates what percentage of your income you
are using to pay debt payments
Total Consumer Debt Payments/Total Income
Less than 15%
✔✔Total Debt-to-Income Ratio - ✔✔Indicates what percentage of your income you are
using to pay all of your debts
Total Debt Payments/Total Income
Less than 36%
✔✔Payroll Deduction - ✔✔Amounts subtracted from gross income that is withheld by an
employer for items like taxes and employee benefits.
✔✔Save More Tomorrow - ✔✔Commit to putting half of every future raise towards your
saving
✔✔Earnings - ✔✔Just one form of income
✔✔Wage - ✔✔An amount of money paid to an employee at a specific rate per hour
worked.
✔✔Salary - ✔✔A fixed amount of money paid to an employee for each pay period.
