CRPC FINAL EXAM GUIDE 2025
|MOST COMMON QUESTIONS WITH CORRECTLY
VERIFIED ANSWERS|ALREADY A+
GRADED|GUARANTEED PASS
Which one of the following is an incorrect statement regarding retirement spending habits?
-expenditures for retirement plan contributions cease
-health costs increase
-automobile-related costs increase
-travel and recreation costs increase. - automobile-related costs increase.
Automobile costs often decrease. Second cars for married couples are less necessary, and
commuting miles are reduced or eliminated for the primary vehicle. Eliminating the second car
reduces insurance expenses, license fees, maintenance costs, and taxes.
During retirement, John wants to receive $50,000 at the end of each year for the rest of his life.
To calculate the amount that he will need to save, you need to solve for
-annuity due—set calculator at begin.
-annuity due—set calculator at end.
-ordinary annuity—set calculator at begin.
-ordinary annuity—set calculator at end. - ordinary annuity—set calculator at end.
You do need to set the calculator in END mode and solve for ordinary annuity. If this were asking
you to solve for an annuity due (where payments occur at the beginning of the period), you
would set calculator for BEG
,Mary wants to retire the first of next year. She wants to receive monthly retirement income
payments on the first day of each month. To solve the amount of capital required to provide her
the income she wants, you need to solve for
-annuity due—set calculator at end.
-ordinary annuity—set calculator at begin.
-ordinary annuity —set calculator at end.
-annuity due—set calculator at begin. - annuity due—set calculator at begin.
To solve this problem, you would need to solve for annuity due, and set the calculator at begin.
John wants to have $1 million in his retirement fund when he retires in 25 years. Assuming that
he earns 11% and inflation is at 3%, how much does John need to save on a level basis at the
end of each year? - $8,740
Set calculator to END mode, one payment per year, and C/ALL
Keystrokes:
1000000, FV
25, N
11 I/YR
PMT Solution: $8,740
Notice that the inflation rate does not come into play here because the question notes that
John will be saving on a level basis. Also, the goal is not expressed in today's dollars. The goal is
simply to have $1 million in the account at retirement.
Mary wants to have a retirement income of $60,000 protected against 3% inflation. She
assumes that she will earn 9%, and wants to have the income for 30 years. How much capital
will be required to provide Mary this much income at the first of each year? (Set your calculator
for four decimal places.) - $890,589
, Set calculator to BEG mode, one payment per year, and C/ALL
Because the problem indicates that Mary wants her income to be protected against inflation,
you will use the inflation-adjusted rate of 5.8252% [((1.09 ÷ 1.03) - 1) × 100 = 5.8252].
Keystrokes:
60000, PMT
5.8252, I/YR
30, N
PV Solution: -$890,589
Margaret needs an annual retirement income of $48,000 protected against 2% inflation. You are
to assume that she will earn 8%, and wants to have the income for 25 years. How much capital
will be required to provide Margaret this much income at the first of each year?
(LO 1-4) - $657,022
This problem uses the same steps as the previous problem (Problem #14). You solve for an
annuity due using the inflation-adjusted rate of 5.8824%.
You would like to examine the Smiths' net worth as of Dec. 31, 20XX. You will prepare - a
statement of financial position.
A statement of financial position shows a client's net worth, which is defined as assets minus
liabilities, as of a specific date. A cash flow statement shows a client's net cash flow (or deficit)
over a period of time (usually one year). Income replacement percentage is another name for
"replacement ratio" and is used as a rough guide in determining the amount of income needed
in retirement relative to pre-retirement income.
Barb wants a retirement income of $5,000 at the beginning of each month for 25 years. If she is
able to earn a return of 7% on invested assets, she needs $700,000 to fund her income.
However, this does not include any inflation adjustment. By incorporating a 3.5% inflation factor,
what is Barb's approximate funding requirement increase, stated at the time of retirement, if
|MOST COMMON QUESTIONS WITH CORRECTLY
VERIFIED ANSWERS|ALREADY A+
GRADED|GUARANTEED PASS
Which one of the following is an incorrect statement regarding retirement spending habits?
-expenditures for retirement plan contributions cease
-health costs increase
-automobile-related costs increase
-travel and recreation costs increase. - automobile-related costs increase.
Automobile costs often decrease. Second cars for married couples are less necessary, and
commuting miles are reduced or eliminated for the primary vehicle. Eliminating the second car
reduces insurance expenses, license fees, maintenance costs, and taxes.
During retirement, John wants to receive $50,000 at the end of each year for the rest of his life.
To calculate the amount that he will need to save, you need to solve for
-annuity due—set calculator at begin.
-annuity due—set calculator at end.
-ordinary annuity—set calculator at begin.
-ordinary annuity—set calculator at end. - ordinary annuity—set calculator at end.
You do need to set the calculator in END mode and solve for ordinary annuity. If this were asking
you to solve for an annuity due (where payments occur at the beginning of the period), you
would set calculator for BEG
,Mary wants to retire the first of next year. She wants to receive monthly retirement income
payments on the first day of each month. To solve the amount of capital required to provide her
the income she wants, you need to solve for
-annuity due—set calculator at end.
-ordinary annuity—set calculator at begin.
-ordinary annuity —set calculator at end.
-annuity due—set calculator at begin. - annuity due—set calculator at begin.
To solve this problem, you would need to solve for annuity due, and set the calculator at begin.
John wants to have $1 million in his retirement fund when he retires in 25 years. Assuming that
he earns 11% and inflation is at 3%, how much does John need to save on a level basis at the
end of each year? - $8,740
Set calculator to END mode, one payment per year, and C/ALL
Keystrokes:
1000000, FV
25, N
11 I/YR
PMT Solution: $8,740
Notice that the inflation rate does not come into play here because the question notes that
John will be saving on a level basis. Also, the goal is not expressed in today's dollars. The goal is
simply to have $1 million in the account at retirement.
Mary wants to have a retirement income of $60,000 protected against 3% inflation. She
assumes that she will earn 9%, and wants to have the income for 30 years. How much capital
will be required to provide Mary this much income at the first of each year? (Set your calculator
for four decimal places.) - $890,589
, Set calculator to BEG mode, one payment per year, and C/ALL
Because the problem indicates that Mary wants her income to be protected against inflation,
you will use the inflation-adjusted rate of 5.8252% [((1.09 ÷ 1.03) - 1) × 100 = 5.8252].
Keystrokes:
60000, PMT
5.8252, I/YR
30, N
PV Solution: -$890,589
Margaret needs an annual retirement income of $48,000 protected against 2% inflation. You are
to assume that she will earn 8%, and wants to have the income for 25 years. How much capital
will be required to provide Margaret this much income at the first of each year?
(LO 1-4) - $657,022
This problem uses the same steps as the previous problem (Problem #14). You solve for an
annuity due using the inflation-adjusted rate of 5.8824%.
You would like to examine the Smiths' net worth as of Dec. 31, 20XX. You will prepare - a
statement of financial position.
A statement of financial position shows a client's net worth, which is defined as assets minus
liabilities, as of a specific date. A cash flow statement shows a client's net cash flow (or deficit)
over a period of time (usually one year). Income replacement percentage is another name for
"replacement ratio" and is used as a rough guide in determining the amount of income needed
in retirement relative to pre-retirement income.
Barb wants a retirement income of $5,000 at the beginning of each month for 25 years. If she is
able to earn a return of 7% on invested assets, she needs $700,000 to fund her income.
However, this does not include any inflation adjustment. By incorporating a 3.5% inflation factor,
what is Barb's approximate funding requirement increase, stated at the time of retirement, if
