Test Bank for Focus on Personal Finance, 7th Edition

Test Bank for
Focus on Personal Finance, 7th Edition

Chapter 1-14 Answers are at the end of Each chapter


Chapter 1


Student name:__________
1) If inflation is expected to be 9.50 percent, how long will it take for prices to double?

A) 5.58 years
B) 6.58 years
C) 17.58 years
D) 11.58 years
E) 7.58 years



Question Details
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 01-01 Identify social and economic influences on financial literacy and personal
Topic : Financial Planning
Topic : Finance and Economics
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Gradable : automatic




2) If a $12,000 investment earns interest of $1,560 in 1 year, what is its rate of return? 2)
______



A) 100 percent
B) 79 percent
C) 26 percent
D) 58 percent


Version 1 1

,E) 13 percent



Question Details
Bloom's : Apply
Difficulty : 3 Hard
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Gradable : automatic
Learning Objective : 01-03 Calculate time value of money situations to analyze personal financial dec
Topic : Time Value of Money




3) If a $10,000 investment earns a 3.8 percent annual return, what should its value be after 1
year?
3) ______


A) $10,000
B) $3,900
C) $10,380
D) $10,038
E) $3,800



Question Details
Bloom's : Apply
Difficulty : 3 Hard
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Gradable : automatic
Learning Objective : 01-03 Calculate time value of money situations to analyze personal financial dec
Topic : Time Value of Money




4) If a $10,000 investment earns a 7 percent annual return, what should its value be after 4
years? Use Exhibit 1-A.
4) ______


A) $13,110
B) $12,800


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, C) $10,700
D) $10,035
E) $14,700



Question Details
Bloom's : Apply
Difficulty : 3 Hard
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Gradable : automatic
Learning Objective : 01-03 Calculate time value of money situations to analyze personal financial dec
Topic : Time Value of Money




5) If Melinda Miller estimates that her $350 weekly grocery bill will increase at an annual
inflation rate of 3 percent, what should her weekly grocery bill be in 2 years? Use Exhibit
1-A.
5) ______


A) $70.00
B) $105.00
C) $371.35
D) $473.35
E) $380.45



Question Details
Bloom's : Apply
Difficulty : 3 Hard
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Gradable : automatic
Learning Objective : 01-03 Calculate time value of money situations to analyze personal financial dec
Topic : Time Value of Money




6) If you deposit $500 into a certificate of deposit earning 3.8 percent, what would be your
earnings after 12 months?
6) ______



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, A) $538.00
B) $500.00
C) $16.50
D) $21.50
E) $19.00



Question Details
Bloom's : Apply
Difficulty : 3 Hard
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Gradable : automatic
Learning Objective : 01-03 Calculate time value of money situations to analyze personal financial dec
Topic : Time Value of Money




7) Randy Hill wants to retire in 25 years with $1,500,000. If he can earn 10 percent per year
on his investments, how much does he need to deposit each year to reach his goal? Use
Exhibit 1-B. (Round your answer to the nearest dollar.)
7) ______


A) $15,252
B) $30,000
C) $60,000
D) $14,752
E) None of these choices are correct.


Question Details
Bloom's : Apply
Difficulty : 3 Hard
Accessibility : Keyboard Navigation
Accessibility : Screen Reader Compatible
Gradable : automatic
Learning Objective : 01-03 Calculate time value of money situations to analyze personal financial dec
Topic : Time Value of Money




Version 1 4