Personal Financial Planning Final Exam
Questions and Answers A+ Guide
The final step of the financial planning process is what Alex referred to as a
"post mortem" or "autopsy". This is the stage where you: - correct
answers✅✅Review your progress and revise your plans to reach your goals
To calculate your net worth, subtract your total liabilities from your total
assets. - correct answers✅✅True
You want your money to double within the next 8 years. Using the Rule of 72,
what approximate annual rate of return do you need to earn each year for
your money to double in 8 years? - correct answers✅✅9%
Alex says that there are 3 main reasons you would like to have money in
your hands today rather than waiting to hopefully receive money in the
future. What causes money to have this "time value"? - correct
answers✅✅Risk, Inflation, Opportunity Cost
Rasheed can afford a monthly car payment of $600 for 4 years at an annual
interest rate of 6 percent. Which of the following is closest to the amount he
will be able to borrow for a new car? Remember, loans are END of period. -
correct answers✅✅$25,548
Maiko lost her job and she was forced to sell a rental property because she
did not have other funds (liquid, emergency, etc) available to meet her
financial obligations. What financial principle best applies to this situation? -
correct answers✅✅Stuff happens, the importance of liquidity.
Kai invested $4,500 in her investment account today. Her account earns an
average rate of return of 7% compounded 4 time(s) per year. She is in the 15
% marginal tax bracket. How much will she have in her account after 20
years after she accounts for income taxes? (Beginning of Period) - correct
answers✅✅$14,663
,Personal Financial Planning Final Exam
Questions and Answers A+ Guide
You want to invest $4,000/year into an account that earns 8% compounded
annually. How much will you have in your account in 30 years? (Beginning of
Period) - correct answers✅✅$489,383
One of the easiest methods of determining if an asset is a tangible asset is to
by answering which of the following questions with "yes"? - correct
answers✅✅Do I use it in everyday life?
What piece of advice might you give to someone for whom the act of saving
is an afterthought? - correct answers✅✅Pay yourself first.
How should a brokerage account that contains stocks and mutual funds be
listed on your balance sheet? - correct answers✅✅Non-Retirement
Investment Asset
While each person's financial plan is different, the following factors should be
incorporated into all sound financial plans: flexibility, liquidity, protection,
and maximizing what is left of your earnings after you pay your taxes. -
correct answers✅✅True
What percent of your gross income does Doc White recommend that you try
to save and/or invest each pay period? - correct answers✅✅5-10%
Millie invested $3,000 in her retirement account today. Her account earns an
average rate of return of 6% compounded annually. How much will she have
in her account after 5 years? (Beginning of Period) - correct
answers✅✅$4,015
, Personal Financial Planning Final Exam
Questions and Answers A+ Guide
Frances invested $4,000 in her retirement account today. Her account earns
an average rate of return of 5% compounded 6 time(s) per year. How much
will she have in her account after 5 years? (Beginning of Period) - correct
answers✅✅$5,131
Most students graduate from college with an average of $35,000 in student
loans. Assume the interest rate on student loans is 7% and the loan will be
paid back over a 10-year period. Calculate the monthly payment on a
$35,000 student loan at 7% for 10 years. (End of period) - correct
answers✅✅$350-$450
Doc White preaches about having an accurate monthly budget. What are the
main uses of a monthly budget? - correct answers✅✅All the above.
(Estimating the maximum monthly car loan payment you will be able to
afford, determining how much money you will be able to save and invest
each month, and figuring out how to reduce your spending without hurting
your lifestyle too much)
Which statement best describes the principle of "Pay Yourself First"? - correct
answers✅✅Save or invest 5-10% of your paycheck (or as much as you can
afford) as soon as you receive it.
Financial planners have several ways of charging for their services. Kendall,
a financial planner, will charge you an "Assets Under Management" fee for
managing your money. Which of the following is a good description of how he
might charge you for his financial services? - correct answers✅✅He will
charge you an annual fee equal to 1.5% of the money you have invested
with him.
Your ________ include cash, checking and savings account balances, and
money market funds. - correct answers✅✅Monetary assets
Questions and Answers A+ Guide
The final step of the financial planning process is what Alex referred to as a
"post mortem" or "autopsy". This is the stage where you: - correct
answers✅✅Review your progress and revise your plans to reach your goals
To calculate your net worth, subtract your total liabilities from your total
assets. - correct answers✅✅True
You want your money to double within the next 8 years. Using the Rule of 72,
what approximate annual rate of return do you need to earn each year for
your money to double in 8 years? - correct answers✅✅9%
Alex says that there are 3 main reasons you would like to have money in
your hands today rather than waiting to hopefully receive money in the
future. What causes money to have this "time value"? - correct
answers✅✅Risk, Inflation, Opportunity Cost
Rasheed can afford a monthly car payment of $600 for 4 years at an annual
interest rate of 6 percent. Which of the following is closest to the amount he
will be able to borrow for a new car? Remember, loans are END of period. -
correct answers✅✅$25,548
Maiko lost her job and she was forced to sell a rental property because she
did not have other funds (liquid, emergency, etc) available to meet her
financial obligations. What financial principle best applies to this situation? -
correct answers✅✅Stuff happens, the importance of liquidity.
Kai invested $4,500 in her investment account today. Her account earns an
average rate of return of 7% compounded 4 time(s) per year. She is in the 15
% marginal tax bracket. How much will she have in her account after 20
years after she accounts for income taxes? (Beginning of Period) - correct
answers✅✅$14,663
,Personal Financial Planning Final Exam
Questions and Answers A+ Guide
You want to invest $4,000/year into an account that earns 8% compounded
annually. How much will you have in your account in 30 years? (Beginning of
Period) - correct answers✅✅$489,383
One of the easiest methods of determining if an asset is a tangible asset is to
by answering which of the following questions with "yes"? - correct
answers✅✅Do I use it in everyday life?
What piece of advice might you give to someone for whom the act of saving
is an afterthought? - correct answers✅✅Pay yourself first.
How should a brokerage account that contains stocks and mutual funds be
listed on your balance sheet? - correct answers✅✅Non-Retirement
Investment Asset
While each person's financial plan is different, the following factors should be
incorporated into all sound financial plans: flexibility, liquidity, protection,
and maximizing what is left of your earnings after you pay your taxes. -
correct answers✅✅True
What percent of your gross income does Doc White recommend that you try
to save and/or invest each pay period? - correct answers✅✅5-10%
Millie invested $3,000 in her retirement account today. Her account earns an
average rate of return of 6% compounded annually. How much will she have
in her account after 5 years? (Beginning of Period) - correct
answers✅✅$4,015
, Personal Financial Planning Final Exam
Questions and Answers A+ Guide
Frances invested $4,000 in her retirement account today. Her account earns
an average rate of return of 5% compounded 6 time(s) per year. How much
will she have in her account after 5 years? (Beginning of Period) - correct
answers✅✅$5,131
Most students graduate from college with an average of $35,000 in student
loans. Assume the interest rate on student loans is 7% and the loan will be
paid back over a 10-year period. Calculate the monthly payment on a
$35,000 student loan at 7% for 10 years. (End of period) - correct
answers✅✅$350-$450
Doc White preaches about having an accurate monthly budget. What are the
main uses of a monthly budget? - correct answers✅✅All the above.
(Estimating the maximum monthly car loan payment you will be able to
afford, determining how much money you will be able to save and invest
each month, and figuring out how to reduce your spending without hurting
your lifestyle too much)
Which statement best describes the principle of "Pay Yourself First"? - correct
answers✅✅Save or invest 5-10% of your paycheck (or as much as you can
afford) as soon as you receive it.
Financial planners have several ways of charging for their services. Kendall,
a financial planner, will charge you an "Assets Under Management" fee for
managing your money. Which of the following is a good description of how he
might charge you for his financial services? - correct answers✅✅He will
charge you an annual fee equal to 1.5% of the money you have invested
with him.
Your ________ include cash, checking and savings account balances, and
money market funds. - correct answers✅✅Monetary assets
