Personal Financial Planning QUESTION
AND ANSWERS Final Exam 2022
Babe Ruth Rule - answeralways have three plans for achieving your financial goals
Goal Credit Score - answer700
post-mortem step of the financial planning process - answerreview your progress and
revise your plans to reach your goals
biggest enemy of trying to improve financial condition - answerprocrastination
why should financial plans be flexible and liquid - answerstuff happens
estimate what percent of your salary to be take home pay - answer75 percent
what does a balance sheet tell you - answerwhat you own (assets) and how you have
paid for it (liabilities and net worth)
what factors guide all financial plans - answerflexibility, liquidity, protection, and
maximizing earnings left after paying taxes
how can you measure tangible assets - answercan I touch it an use it in everyday life
what are the main uses of a monthly budget - answer1) determining how much money
you will be able to save and invest each month
2) figuring out how to reduce your spending without hurting your lifestyle too much
3) estimating the maximum monthly car loan payment you will be able to afford
how much money should you have as personal savings after you graduate - answerone
to two months of living expenses
what is net worth - answerthe amount something is worth minus the amount you still
owe on it
what are important questions a financial advisor will ask you - answerwhat do you own
and what do you owe
what is the fastest way to improve your financial position - answerreduce your spending
without hurting your lifestyle too much
risk return - answerchance of losing money you invest but also a chance of getting
money back
what does it mean to pay yourself first - answersave or invest money from your
paycheck as soon as you receive it
,Personal Financial Planning QUESTION
AND ANSWERS Final Exam 2022
diversification can also be said by - answerdont put all your eggs in one basket
what is an assets under management fee - answeran annual fee equal to 'x' amount of
the money you have invested with him
1,000 at 12% interest for 42 years will yield - answer$163,987
a strong record keeping system allows you to - answerknow exactly how much youre
spending, track expenses, and know where youre spending your financial resources
a CD with 10,000 for 5 years at 4% quarterly interest will yield - answer12,200-12,300
always use at least three sources of info to get the 'big picture' is what financial principle
- answerknowledge is power
evaluating your financial health consists of - answerdetermining your worth, preparing a
balance sheet, preparing an income statement, and determining where your money
comes from and where it goes
regularly saving a little money when you are young can - answerresult in a large final
payoff
monthly payments for a 35,000 student loan at 7% for 10 years in - answer$350-450
why do most Americans keep financial records - answerto prepare their income taxes
wants 30,000 in taxable account after 10 years: 6% annual interest, is in 15% marginal
tax bracket. yearly investment needs to be - answer2,200-2,300
550 for 72 months at 7.5% interest. can afford a loan of - answer31,810
Tim and Autumn Davis are trying to figure out their current financial health. They will
pay off their car loan in three years, their gross household income is $5,700 per month,
and they receive $95 per month in interest income from their investments. They have
listed the following items from their most recent statements.
Savings account: $3,200
Checking account: $1,800
Credit card balance: $3,000
Car loan balance: $18,000
Car market value: $15,000
Furniture market value: $4,000
Stocks and bonds: $15,000
What is their current net worth? - answer18,000
, Personal Financial Planning QUESTION
AND ANSWERS Final Exam 2022
how long should you keep your federal and state income tax records - answer3-7 years
to get your money to double in the next four years, using the rule of 72 what annual rate
of return do you need - answer18%
net worth is - answerassets minus total debt
currently liabilities are - answerthose that can be paid off in full within 12 months
what is the piece of cardboard that shows you where the money is leaking out of your
wallet - answerdaily expense tracker
to have 65,000 after 5 years with 7% compounded interest semi-annually you need to
invest __________ every six months - answer5,250-5,400
a vehicle leased in your name is NOT - answeran example of a tangible asset to list on
your balance sheet
what percent of your gross income should you invest or save each pay period -
answer5-10%
what causes money to have a time value - answerrisk, inflation, and opportunity cost
the five steps of financial planning are - answer1) Evaluate your financial health. Record
all expenses for a month to compare income and expenses.
2) Define your financial goals. Pay off credit card(s) by the end of this school term.
3) Develop a plan of action. Develop a budget matching income and projected
expenses for the remainder of this academic year.
4) Implement the plan. Reduce expenses in problem areas so amounts do not exceed
budgeted projections.
5) Review progress on the plan, reevaluate the plan, and revise the plan or start over
with a new one. Based on this year, develop a revised budget for next year based on
projected income and expenses.
what is the enemy of compound interest making it hard to reach your financial goals -
answerinflation
a 60,000 car that increases by 10% in value every year will be worth ________ after 15
years - answer250,000-255,000
your financial situation is insolvent when - answeryour assets are less than your
liabilities
AND ANSWERS Final Exam 2022
Babe Ruth Rule - answeralways have three plans for achieving your financial goals
Goal Credit Score - answer700
post-mortem step of the financial planning process - answerreview your progress and
revise your plans to reach your goals
biggest enemy of trying to improve financial condition - answerprocrastination
why should financial plans be flexible and liquid - answerstuff happens
estimate what percent of your salary to be take home pay - answer75 percent
what does a balance sheet tell you - answerwhat you own (assets) and how you have
paid for it (liabilities and net worth)
what factors guide all financial plans - answerflexibility, liquidity, protection, and
maximizing earnings left after paying taxes
how can you measure tangible assets - answercan I touch it an use it in everyday life
what are the main uses of a monthly budget - answer1) determining how much money
you will be able to save and invest each month
2) figuring out how to reduce your spending without hurting your lifestyle too much
3) estimating the maximum monthly car loan payment you will be able to afford
how much money should you have as personal savings after you graduate - answerone
to two months of living expenses
what is net worth - answerthe amount something is worth minus the amount you still
owe on it
what are important questions a financial advisor will ask you - answerwhat do you own
and what do you owe
what is the fastest way to improve your financial position - answerreduce your spending
without hurting your lifestyle too much
risk return - answerchance of losing money you invest but also a chance of getting
money back
what does it mean to pay yourself first - answersave or invest money from your
paycheck as soon as you receive it
,Personal Financial Planning QUESTION
AND ANSWERS Final Exam 2022
diversification can also be said by - answerdont put all your eggs in one basket
what is an assets under management fee - answeran annual fee equal to 'x' amount of
the money you have invested with him
1,000 at 12% interest for 42 years will yield - answer$163,987
a strong record keeping system allows you to - answerknow exactly how much youre
spending, track expenses, and know where youre spending your financial resources
a CD with 10,000 for 5 years at 4% quarterly interest will yield - answer12,200-12,300
always use at least three sources of info to get the 'big picture' is what financial principle
- answerknowledge is power
evaluating your financial health consists of - answerdetermining your worth, preparing a
balance sheet, preparing an income statement, and determining where your money
comes from and where it goes
regularly saving a little money when you are young can - answerresult in a large final
payoff
monthly payments for a 35,000 student loan at 7% for 10 years in - answer$350-450
why do most Americans keep financial records - answerto prepare their income taxes
wants 30,000 in taxable account after 10 years: 6% annual interest, is in 15% marginal
tax bracket. yearly investment needs to be - answer2,200-2,300
550 for 72 months at 7.5% interest. can afford a loan of - answer31,810
Tim and Autumn Davis are trying to figure out their current financial health. They will
pay off their car loan in three years, their gross household income is $5,700 per month,
and they receive $95 per month in interest income from their investments. They have
listed the following items from their most recent statements.
Savings account: $3,200
Checking account: $1,800
Credit card balance: $3,000
Car loan balance: $18,000
Car market value: $15,000
Furniture market value: $4,000
Stocks and bonds: $15,000
What is their current net worth? - answer18,000
, Personal Financial Planning QUESTION
AND ANSWERS Final Exam 2022
how long should you keep your federal and state income tax records - answer3-7 years
to get your money to double in the next four years, using the rule of 72 what annual rate
of return do you need - answer18%
net worth is - answerassets minus total debt
currently liabilities are - answerthose that can be paid off in full within 12 months
what is the piece of cardboard that shows you where the money is leaking out of your
wallet - answerdaily expense tracker
to have 65,000 after 5 years with 7% compounded interest semi-annually you need to
invest __________ every six months - answer5,250-5,400
a vehicle leased in your name is NOT - answeran example of a tangible asset to list on
your balance sheet
what percent of your gross income should you invest or save each pay period -
answer5-10%
what causes money to have a time value - answerrisk, inflation, and opportunity cost
the five steps of financial planning are - answer1) Evaluate your financial health. Record
all expenses for a month to compare income and expenses.
2) Define your financial goals. Pay off credit card(s) by the end of this school term.
3) Develop a plan of action. Develop a budget matching income and projected
expenses for the remainder of this academic year.
4) Implement the plan. Reduce expenses in problem areas so amounts do not exceed
budgeted projections.
5) Review progress on the plan, reevaluate the plan, and revise the plan or start over
with a new one. Based on this year, develop a revised budget for next year based on
projected income and expenses.
what is the enemy of compound interest making it hard to reach your financial goals -
answerinflation
a 60,000 car that increases by 10% in value every year will be worth ________ after 15
years - answer250,000-255,000
your financial situation is insolvent when - answeryour assets are less than your
liabilities
