CYAF 222 Exam Questions with Verified Correct
Answers
Invest now or later? Twins Samantha and Adam are both age 26.
Beginning at age 26, Samantha invests $2000 per year for 10 years and then never sets
aside another penny.
Adam waits 10 years and then invests $2000 per year for the next 30 years.
Assuming they both earn 8%, how much will each twin have at age 66?
Step 1: Samantha starts investing $2000 annually for 10 years and then stops. When
Samantha reaches age 36 she has accumulated:
$28,973.20
Invest now or later? Twins Samantha and Adam are both age 26.
Beginning at age 26, Samantha invests $2000 per year for 10 years and then never sets
aside another penny.
Adam waits 10 years and then invests $2000 per year for the next 30 years.
Assuming they both earn 8%, how much will each twin have at age 66?
,Step 2: After Samantha stopped contributing to her investment she left the total she had
accumulated in the account to continue earning 8% annually.
When Samantha reaches age 66, her investment has grown to:
$291,548.61
Invest now or later? Twins Samantha and Adam are both age 26.
Beginning at age 26, Samantha invests $2000 per year for 10 years and then never sets
aside another penny.
Adam waits 10 years and then invests $2000 per year for the next 30 years.
Assuming they both earn 8%, how much will each twin have at age 66?
Step 2: After Samantha stopped contributing to her investment she left the total she had
accumulated in the account to continue earning 8% annually.
When Samantha reaches age 66, her investment has grown to:
$226,566.40
Invest now or later? Twins Samantha and Adam are both age 26.
,Beginning at age 26, Samantha invests $2000 per year for 10 years and then never sets
aside another penny.
Adam waits 10 years and then invests $2000 per year for the next 30 years.
Assuming they both earn 8%, how much will each twin have at age 66?
Step 4: Adam contributed $60,000 to his investment ($2,000 annually for 30 years) whereas
Samantha only contributed $20,000 to her investment ($2,000 annually for 10 years).
Time makes a huge difference, though Samantha only invested 1/3 as much money as Adam
did, her investment was able to outpace Adam's by:
$64,982.21
These calculations are a great example of how time impacts return on savings!
By starting earlier Samantha was able to earn over $60,000 more than Adam !
This is amazing if you consider that, over time, Adam actually invested $40,000 more than
Samantha !
This means that Samantha not only earned over $60,000 more than Adam , but she also
had an additional $40,000 that she could use for something else.
, Taken together, Samantha came out over $60,000 ahead of Adam simply because she
started 10 years earlier!
Lesson to be Learned: Start Investing Early!
1. Samantha
2. Adam
3. Adam
4. Samantha
5. Samantha
6. Adam
7. Samantha
8. Adam
Which of the following sets NOW accounts apart from other checking accounts?
They pay interest
____ typically pay the highest rates of interest on savings.
Credit unions
Which of the following is the best advice for people who want to start saving regularly?
Pay yourself first
The primary reason for giving a child an allowance is to
Teach the child about how to manage money
A stock brokerage firm is a licensed financial institution that
Answers
Invest now or later? Twins Samantha and Adam are both age 26.
Beginning at age 26, Samantha invests $2000 per year for 10 years and then never sets
aside another penny.
Adam waits 10 years and then invests $2000 per year for the next 30 years.
Assuming they both earn 8%, how much will each twin have at age 66?
Step 1: Samantha starts investing $2000 annually for 10 years and then stops. When
Samantha reaches age 36 she has accumulated:
$28,973.20
Invest now or later? Twins Samantha and Adam are both age 26.
Beginning at age 26, Samantha invests $2000 per year for 10 years and then never sets
aside another penny.
Adam waits 10 years and then invests $2000 per year for the next 30 years.
Assuming they both earn 8%, how much will each twin have at age 66?
,Step 2: After Samantha stopped contributing to her investment she left the total she had
accumulated in the account to continue earning 8% annually.
When Samantha reaches age 66, her investment has grown to:
$291,548.61
Invest now or later? Twins Samantha and Adam are both age 26.
Beginning at age 26, Samantha invests $2000 per year for 10 years and then never sets
aside another penny.
Adam waits 10 years and then invests $2000 per year for the next 30 years.
Assuming they both earn 8%, how much will each twin have at age 66?
Step 2: After Samantha stopped contributing to her investment she left the total she had
accumulated in the account to continue earning 8% annually.
When Samantha reaches age 66, her investment has grown to:
$226,566.40
Invest now or later? Twins Samantha and Adam are both age 26.
,Beginning at age 26, Samantha invests $2000 per year for 10 years and then never sets
aside another penny.
Adam waits 10 years and then invests $2000 per year for the next 30 years.
Assuming they both earn 8%, how much will each twin have at age 66?
Step 4: Adam contributed $60,000 to his investment ($2,000 annually for 30 years) whereas
Samantha only contributed $20,000 to her investment ($2,000 annually for 10 years).
Time makes a huge difference, though Samantha only invested 1/3 as much money as Adam
did, her investment was able to outpace Adam's by:
$64,982.21
These calculations are a great example of how time impacts return on savings!
By starting earlier Samantha was able to earn over $60,000 more than Adam !
This is amazing if you consider that, over time, Adam actually invested $40,000 more than
Samantha !
This means that Samantha not only earned over $60,000 more than Adam , but she also
had an additional $40,000 that she could use for something else.
, Taken together, Samantha came out over $60,000 ahead of Adam simply because she
started 10 years earlier!
Lesson to be Learned: Start Investing Early!
1. Samantha
2. Adam
3. Adam
4. Samantha
5. Samantha
6. Adam
7. Samantha
8. Adam
Which of the following sets NOW accounts apart from other checking accounts?
They pay interest
____ typically pay the highest rates of interest on savings.
Credit unions
Which of the following is the best advice for people who want to start saving regularly?
Pay yourself first
The primary reason for giving a child an allowance is to
Teach the child about how to manage money
A stock brokerage firm is a licensed financial institution that