FIN 2100 FINAL EXAM (UCF)
QUESTIONS WITH ALL CORRECT
ANSWERS 2025-2026 UPDATED.
The recent trend is for the federal government and corporations to shift more responsibility to
the individual with respect to providing for their financial future. - Answer True
An individual who has an adjustable-rate mortgage (ARM) is primarily concerned about _____
risk. - Answer Interest rate
Assume the following:
Pre-tax return = 14.0%
Tax rate = 25%
Inflation rate = 4%
What is your real return using the simple formula? - Answer Real Return = After-Tax Return -
Inflation Rate
After Tax Return = Pre-Tax Return x ( 1- Tax Rate)
6.5%
Recently, the HIGHEST unemployment rates have been for: - Answer Individuals who did not
complete high school
What is the first step in the financial planning process? - Answer Determine your current
financial condition.
Individuals should generally be careful when considering financial advice from those in the
financial services industry since often times there can be a conflict of interest. - Answer True
You have a restaurant tab of $54.89. If you wanted to leave a 15% tip then you should add
about: - Answer $8.50
You just received a copy of an email from an unknown investment advisor to a client
recommending the purchase of a stock. The email appears to have been sent to you by mistake.
The stock trades for $1.37/share and you could easily afford to buy 300 shares. The broker
believes that the company will announce some significant positive news in the near future that
will cause the stock to increase. The short term target price is $2.00/share, and the long term
,target price is $4.50/share. What is your best course of action? - Answer Do nothing. This is
probably a scam. Do not trust the information in this email.Do not believe the advice from the
broker.
Using the data from the Chapter 1 Web Work assignment, answer question below using the
assumptions shown in the Web Work: When will you have $1 million?
Note: This is the balance before adjusting for inflation.
Age = 20 yo
Millionaire target age = 65 yo
Amount you have saved today = $1
Amount you will save (taxable) = $400/mo
Average annual gain = 8%
Inflation rate = 3% - Answer At age 58
Using the Rule of 72, approximately how long does it take for your money to double in value if
you earn an 14% annual return? - Answer 5.14 years
72/14
If the economy is strong with low unemployment and we begin to experience rapid increases in
inflation, the FED will: - Answer Increase interest rates
During periods of higher and increasing inflation, all of the following would be expected to
occur EXCEPT: - Answer Higher disposable income for senior citizens on fixed incomes from
corporate pensions and annuities.
A UCF graduate has two job offers. Job 1 pays $48,000 with a $5,000 non-taxable benefit, while
Job 2 pays $47,400 and has a $5,700 non-taxable benefit.
What is the PRE-TAX value of each job assuming the graduate is in a 10% marginal tax bracket?
(Round to the nearest dollar) - Answer Job 1: $53,556 Job 2: $53,733
Pre-tax benefit * (1-tax rate) = After-tax benefit value
After-tax benefit / (1-tax rate) = pre-tax benefit value
What is the AFTER TAX value of a $5,500 taxable (pre-tax) benefit, assuming a 24% marginal tax
rate? - Answer $4,180
,Which of the following is TRUE?
a) More and more employers are using credit reports as hiring tools.
b) Applicants will not be told if credit histories are being used in the hiring process.
c) Job applicants will be told if credit histories are being used in the hiring process on the
application.
d) It is against the law for employers to use credit reports as hiring tools.
e) Answers a and c are true. - Answer e) Answers a and c are true.
A UCF graduate is offered a salary of $50,000 on Jan. 1, 2024 and expects to receive 3.0% raises
each year thereafter on Jan. 1.
What would be his/her salary at the end of January in 2031?
(Round to the nearest dollar, this is a future value of a single sum TVM problem) - Answer
$61,494
In general, experts advise that one must save _______ of your salary in order to have sufficient
funds to maintain your standard of living in retirement (this % would include both your 401-K
savings and the employer match and other savings). - Answer 10 - 15%
An employee makes $115,000 per year and saves 7% of his/her salary in the company's 401-K
plan. The company matches 4% of the salary when the employee saves up to 5%.
Further, the employee pays $2,000 per year in health insurance premiums for a family health
insurance plan from the employer.
What will be the W-2 compensation for this employee? - Answer $104,950
A UCF graduate is earning $45,000 a year in Orlando, and has an offer to move to a city where
the cost of living is 15% higher.
What would be the minimum salary this graduate would need to maintain the same standard of
living? - Answer $51,750
A UCF graduate is getting a masters degree at night. The graduate expects to receive an annual
salary of $7,000 per year more as a result of getting a masters degree.
The graduate plans to work for 40 years, so he/she will earn $280,000 more in their lifetime
($7,000 x 40 years).
What is the present value of a stream of $7,000 payments for 40 years based on an annual
interest rate of 7%?
Assume the $7,000 is paid annually at the END of the year.
Hint: Calculate Net Present Value - Answer $93,322, yes get the masters degree, the net
present value of this decision is $68,322.
, Assume the following for a 401-K plan.
Annual salary = $72,000
Monthly salary = $6,000
Pay date = End of each month
Amount you save in 401-K = 5% of salary
Amount of employer match = 4% of salary
How much will you have in the 401-K plan after 40 years assuming a 8% investment return?
(Round to the nearest dollar) - Answer $1,885,144
Liquid assets = $16,000
Current liabilities (credit cards) = $3,000
Student debt = $25,000
Investments in 401-K plan = $89,000
Salary = $50,000
Value of Home = $250,000
Due on Mortgage = $175,000
Household assets = $20,000
What is this person's net worth? - Answer $172,000
If a student has a net worth of $50,000 and liabilities of $30,000, what are his/her total assets? -
Answer $80,000
Assume the following:
Assets = $122,500
Liabilities = $87,500
Net Worth = $35,000
Monthly credit payments = $1,640
Monthly take home pay = $8,200
What is the debt to net worth ratio and debt payments ratio for this individual? - Answer
Debt ratio = 2.5
Debt payments ratio = .20
Which of the following is NOT one of the primary financial statements? - Answer A check
register
QUESTIONS WITH ALL CORRECT
ANSWERS 2025-2026 UPDATED.
The recent trend is for the federal government and corporations to shift more responsibility to
the individual with respect to providing for their financial future. - Answer True
An individual who has an adjustable-rate mortgage (ARM) is primarily concerned about _____
risk. - Answer Interest rate
Assume the following:
Pre-tax return = 14.0%
Tax rate = 25%
Inflation rate = 4%
What is your real return using the simple formula? - Answer Real Return = After-Tax Return -
Inflation Rate
After Tax Return = Pre-Tax Return x ( 1- Tax Rate)
6.5%
Recently, the HIGHEST unemployment rates have been for: - Answer Individuals who did not
complete high school
What is the first step in the financial planning process? - Answer Determine your current
financial condition.
Individuals should generally be careful when considering financial advice from those in the
financial services industry since often times there can be a conflict of interest. - Answer True
You have a restaurant tab of $54.89. If you wanted to leave a 15% tip then you should add
about: - Answer $8.50
You just received a copy of an email from an unknown investment advisor to a client
recommending the purchase of a stock. The email appears to have been sent to you by mistake.
The stock trades for $1.37/share and you could easily afford to buy 300 shares. The broker
believes that the company will announce some significant positive news in the near future that
will cause the stock to increase. The short term target price is $2.00/share, and the long term
,target price is $4.50/share. What is your best course of action? - Answer Do nothing. This is
probably a scam. Do not trust the information in this email.Do not believe the advice from the
broker.
Using the data from the Chapter 1 Web Work assignment, answer question below using the
assumptions shown in the Web Work: When will you have $1 million?
Note: This is the balance before adjusting for inflation.
Age = 20 yo
Millionaire target age = 65 yo
Amount you have saved today = $1
Amount you will save (taxable) = $400/mo
Average annual gain = 8%
Inflation rate = 3% - Answer At age 58
Using the Rule of 72, approximately how long does it take for your money to double in value if
you earn an 14% annual return? - Answer 5.14 years
72/14
If the economy is strong with low unemployment and we begin to experience rapid increases in
inflation, the FED will: - Answer Increase interest rates
During periods of higher and increasing inflation, all of the following would be expected to
occur EXCEPT: - Answer Higher disposable income for senior citizens on fixed incomes from
corporate pensions and annuities.
A UCF graduate has two job offers. Job 1 pays $48,000 with a $5,000 non-taxable benefit, while
Job 2 pays $47,400 and has a $5,700 non-taxable benefit.
What is the PRE-TAX value of each job assuming the graduate is in a 10% marginal tax bracket?
(Round to the nearest dollar) - Answer Job 1: $53,556 Job 2: $53,733
Pre-tax benefit * (1-tax rate) = After-tax benefit value
After-tax benefit / (1-tax rate) = pre-tax benefit value
What is the AFTER TAX value of a $5,500 taxable (pre-tax) benefit, assuming a 24% marginal tax
rate? - Answer $4,180
,Which of the following is TRUE?
a) More and more employers are using credit reports as hiring tools.
b) Applicants will not be told if credit histories are being used in the hiring process.
c) Job applicants will be told if credit histories are being used in the hiring process on the
application.
d) It is against the law for employers to use credit reports as hiring tools.
e) Answers a and c are true. - Answer e) Answers a and c are true.
A UCF graduate is offered a salary of $50,000 on Jan. 1, 2024 and expects to receive 3.0% raises
each year thereafter on Jan. 1.
What would be his/her salary at the end of January in 2031?
(Round to the nearest dollar, this is a future value of a single sum TVM problem) - Answer
$61,494
In general, experts advise that one must save _______ of your salary in order to have sufficient
funds to maintain your standard of living in retirement (this % would include both your 401-K
savings and the employer match and other savings). - Answer 10 - 15%
An employee makes $115,000 per year and saves 7% of his/her salary in the company's 401-K
plan. The company matches 4% of the salary when the employee saves up to 5%.
Further, the employee pays $2,000 per year in health insurance premiums for a family health
insurance plan from the employer.
What will be the W-2 compensation for this employee? - Answer $104,950
A UCF graduate is earning $45,000 a year in Orlando, and has an offer to move to a city where
the cost of living is 15% higher.
What would be the minimum salary this graduate would need to maintain the same standard of
living? - Answer $51,750
A UCF graduate is getting a masters degree at night. The graduate expects to receive an annual
salary of $7,000 per year more as a result of getting a masters degree.
The graduate plans to work for 40 years, so he/she will earn $280,000 more in their lifetime
($7,000 x 40 years).
What is the present value of a stream of $7,000 payments for 40 years based on an annual
interest rate of 7%?
Assume the $7,000 is paid annually at the END of the year.
Hint: Calculate Net Present Value - Answer $93,322, yes get the masters degree, the net
present value of this decision is $68,322.
, Assume the following for a 401-K plan.
Annual salary = $72,000
Monthly salary = $6,000
Pay date = End of each month
Amount you save in 401-K = 5% of salary
Amount of employer match = 4% of salary
How much will you have in the 401-K plan after 40 years assuming a 8% investment return?
(Round to the nearest dollar) - Answer $1,885,144
Liquid assets = $16,000
Current liabilities (credit cards) = $3,000
Student debt = $25,000
Investments in 401-K plan = $89,000
Salary = $50,000
Value of Home = $250,000
Due on Mortgage = $175,000
Household assets = $20,000
What is this person's net worth? - Answer $172,000
If a student has a net worth of $50,000 and liabilities of $30,000, what are his/her total assets? -
Answer $80,000
Assume the following:
Assets = $122,500
Liabilities = $87,500
Net Worth = $35,000
Monthly credit payments = $1,640
Monthly take home pay = $8,200
What is the debt to net worth ratio and debt payments ratio for this individual? - Answer
Debt ratio = 2.5
Debt payments ratio = .20
Which of the following is NOT one of the primary financial statements? - Answer A check
register
