MCS 2100 EXAM REVIEW QUESTIONS
WITH GUARANTEED PASS
SOLUTIONS 2025-2026 UPDATED.
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=PxRxT
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
discretionary income - Answer Disposable income available for spending and saving after an
individual has purchased the basic necessities of food, clothing, and shelter
income - Answer money received, especially on a regular basis, for work or through
investments.
insolvency - Answer the inability to pay debts when they are due
Liabilities - Answer Amounts owed to creditors
liquid assets - Answer cash and items that can be quickly converted to cash
long-term liabilities - Answer liabilities owed for more than a year
money management - Answer Day-to-day
financial activities necessary to
manage current personal economic
resources while working
toward long-term financial
security.
net worth - Answer total assets minus total liabilities
personal balance sheet - Answer A
financial statement that reports
what an individual or a family
owns and owes; also called a net
worth statement.
safety deposit box - Answer a box at a financial institution where a customer can store
documents, jewelry, or other valuables
WITH GUARANTEED PASS
SOLUTIONS 2025-2026 UPDATED.
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=PxRxT
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
discretionary income - Answer Disposable income available for spending and saving after an
individual has purchased the basic necessities of food, clothing, and shelter
income - Answer money received, especially on a regular basis, for work or through
investments.
insolvency - Answer the inability to pay debts when they are due
Liabilities - Answer Amounts owed to creditors
liquid assets - Answer cash and items that can be quickly converted to cash
long-term liabilities - Answer liabilities owed for more than a year
money management - Answer Day-to-day
financial activities necessary to
manage current personal economic
resources while working
toward long-term financial
security.
net worth - Answer total assets minus total liabilities
personal balance sheet - Answer A
financial statement that reports
what an individual or a family
owns and owes; also called a net
worth statement.
safety deposit box - Answer a box at a financial institution where a customer can store
documents, jewelry, or other valuables
