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Quiz 1 Personal Finance

Total questions: 60

Worksheet time: 2hrs 21mins

Name
Class
Date
1.
Which is the "R" in SMART Goal?
a)
Realistic
b)
Required
2.
Which is the "M" in SMART Goal?
a)
Measurable
b)
Magnificent
3.
Kaylee will save her allowance of $25 per month to purchase a $150 mp3 player in six months. This is an example of what type of goal?
a)
Short-Term Goal
b)
This is not an example of a goal.
c)
Mid-Term Goal
d)
Long-Term Goal
4.
Something a person intends to acquire, achieve, or accomplish in the future
a)
Opportunity Cost
b)
Financial Planning
c)
Goal
d)
Trade-Off
5.
Which is the "A" in SMART Goal?
a)
Acquired
b)
Attainable
6.
Something a person intends to acquire, achieve, or accomplish that will be attained in LESS than one year
a)
Long-Term Goal
b)
Trade-Off
c)
Short-Term Goal
d)
Financial Planing
7.
Which is the "T" in SMART Goal?
a)
True
b)
Time Bound
8.
Which part of the SMART goal is missing? "I plan to save $1500 to buy a used car. I will do this by canceling my home cable service and saving that $75 each month instead."
a)
Attainable
b)
Realistic
c)
Measurable
d)
Time-Bound
9.
Which one is the "S" in SMART Goal?
a)
Spectacular
b)
Specific
10.
Bobby and Betty, a recently married couple, set a goal of putting $350 in savings every month to make a down payment on a home in five years. What type of goal have they set?
a)
Unrealistic
b)
Short-Term Goal
c)
Intermediate
d)
Long-Term
11.
Which part of the SMART Goal requires you to clearly define your end result?
a)
Measurable
b)
Time-Bound
c)
Specific
d)
Realistic
12.
What is personal finance?
a)
 a budget
b)
 income and expenses
c)
 savings account
d)
all of the above
13.
What is income?
a)
a resource necessary to survive
b)
a balance of your income and spending
c)
money earned
14.
The amount owed on your credit card is an example of a liability. 
a)
True
b)
False
15.
Savings should be included in your list of cash inflows when creating the personal cash flow statement.
a)
True
b)
False
16.

Gerold invested $5,600 in an account that pays 5 percent simple interest. How much money will he have at the end of ten years?

a)

$7,710

b)

$8,000

c)

$8,400

d)

$9,099

e)

$8,678

17.

You invested $1,400 in an account that pays 5 percent simple interest. How much more could you have earned over a 20-year period if the interest had compounded annually?

a)

$749.22

b)

$830.11

c)

$882.19

d)

$901.15

e)

$914.62

18.

You own a classic automobile that is currently valued at $150,000. If the value increases by 6.5 percent annually, how much will the automobile be worth ten years from now?

a)

$244,035.00

b)

$251,008.17

c)

$270,013.38

d)

$281,570.62

e)

$291,480.18

19.

You hope to buy your dream car four years from now. Today, that car costs $82,500. You expect the price to increase by an average of 4.8 percent per year over the next four years. How much will your dream car cost by the time you are ready to buy it?

a)

$98,340.00

b)

$98,666.67

c)

$99,517.41

d)

$99,818.02

e)

$100,023.16

20.

You just received $225,000 from an insurance settlement. You have decided to set this money aside and invest it for your retirement. Currently, your goal is to retire 25 years from today. How much more will you have in your account on the day you retire if you can earn a compounded annual of 10.5 percent rather than just 8 percent?

a)

$417,137

b)

$689,509

c)

$1,050,423

d)

$1,189,576

e)

$1,818,342

21.

You would like to give your daughter $75,000 towards her college education 17 years from now. How much money must you set aside today for this purpose if you can earn 8 percent compounded annually on your investments?

a)

$18,388.19

b)

$20,270.17

c)

$28,417.67

d)

$29,311.13

e)

$32,488.37

22.
Your 3 year investment of $20,000 received 5.2% interest compounded annually.  What is your total return?
a)
$23,285.05
b)
$3,285.05
c)
$2,385
d)
$32,285
23.

Emily’s parents put $1,500 in her bank account for college tuition. At an interest rate of 8.25% compounded semiannually,what will be the balance after 18 years?

a)

$6,273.50

b)

$6,314.08

c)

$6,385.72

d)

$6,427.94

24.

Deana invested $1,000 in savings bonds. If the bonds earn 6.75% interest compounded semi-annually, how much total money will Deana earn in 15 years?

a)

$1,584.62

b)

$2,651.39

c)

$2,706.86

d)

$1,825.10

25.

Approximately what interest rate would be needed in order to grow Christian's investment of $1400 to $2500 in 10 years if the interest was compound monthly?

a)

5.96%

b)

5.84%

c)

5.81%

d)

5.88%

26.

Treasure won $3,000 from a radio contest. If she puts this money in a bank account that earns 2.9% interest compounded quarterly, how much total will she earn in 10 years?

a)

$4915.59

b)

$3933.28

c)

$2979.81

d)

$4005.09

27.

You want to save $5,000 for future family vacation. If you assume you can get an interest rate of 4.3% compounded monthly, then how much will you need to invest NOW to reach your vacation goal in 3 years?

a)

$307,042,791

b)

$5,000

c)

$3,250

d)

$4,395.89

28.
Approximately what interest rate would be needed in order to grow an investment of $1,400 to $2,500 in 10 years if the interest was compound monthly?
a)
5.96%
b)
5.84%
c)
5.81%
d)
5.88%
29.

Jason deposits $2,000 yearly into a retirement account (ordinary annuity). The account pays 7% compounded annually. How much money will be in the account after 25 years?

a)

$78,268.97

b)

$126,498.08

c)

$42,160.07

d)

$124,498.10

30.

An IRA Account. Matthew contributes $50 per month into the Kaufman Fund that earns 15.5% annual interest. What is the value of Matthew's investment after 20 years?

a)

$88,888

b)

$1,132.76

c)

$80,367.73

d)

$7,593.39

31.

For her first birthday, Polly’s grandparents invested$1000 in an 18-year certificate for her that pays 8% compounded annually. How much will the certificate be worth on Polly’s 19th birthday?

a)

$5996.02

b)

$3996.02

c)

$3890

d)

$1996.02

32.

A couple needs $15,000 as a down payment for a home. If they invest the $10,000 they have at 8% compounded quarterly, how long will it take for the money to growinto $15,000?

a)

6.12 years (approximately)

b)

3.12 years (approximately)

c)

4.12 years (approximately)

d)

5.12 years (approximately)

33.

The Weidmans want to save $40,000 in 2 years for a down payment on a house. If they make monthly deposits in an account paying 12%, compounded monthly, what is the size of the payments that are required to meet their goal?

a)

$1482.94

b)

$2482.94

c)

$182.12

d)

$482.37

34.

How much must be deposited at the beginning of each year in an account that pays 8%, compounded annually, so that the account will contain $24,000 at the end of 5 years?

a)

$378.23

b)

$3787.92

c)

$2361.12

d)

$3469.92

35.

A couple has determined that they need $300,000 to establish an annuity when they retire in 25 years. How much money should they deposit at the end of each month in an investment plan that pays 10%, compounded monthly, so they will have the $300,000 in 25 years?

a)

$366.10

b)

$324.31

c)

$266.10

d)

$226.10

36.

Mr. Gordon plans to invest $300 at the end of each month in an account that pays 9%, compounded monthly. After how many months will the account be worth $50,000?

a)

n 􏰟= 108.5 (~109 months)

b)

n 􏰟= 9.08 (~9.1 months)

c)

n 􏰟= 98.5 (~99 months)

d)

n 􏰟= 36.3 (~36 months)

37.

Grandparents plan to open an account on their grand- child’s birthday and contribute each month until she goes to college. How much must they contribute at the beginning of each month in an investment that pays 12%, compounded monthly, if they want the balance to be $180,000 at the end of 18 years?

a)

$235.16

b)

$335.16

c)

$536.21

d)

$723.16

38.

An inheritance of $250,000 is invested at 9%, compounded monthly. If $2500 is withdrawn at the end of each month, how long will it be until the account balance is $0?

a)

n = 185.5

b)

n = 15.46

c)

n = 46.38

d)

n = 85.5

39.

Suppose a lottery prize of $50,000 is invested by a couple for future use as their child’s college fund. The family plans to use the money as 8 semiannual payments at the end of each 6-month period after payments are deferred for 10 years. How much would each pay- ment be if the money can be invested at 8.6% compounded semiannually?

a)

$17,451.26

b)

$1,563.26

c)

$19,987.35

d)

$13,451.26

40.

With a present value of $135,000, what is the size of the withdrawals that can be made at the end of each quarter for the next 10 years if money is worth 6.4%, compounded quarterly?

a)

$5595.46

b)

$4595.46

c)

$6795.86

d)

$4795.47

41.

What amount must be set aside now to generate payments of $50,000 at the beginning of each year for the next 12 years if money is worth 5.92%, compounded

a)

$45,962.23

b)

$445,962.23

c)

$564,982.45

d)

$78,962.23

42.

A debt of $8000 is to be amortized with 8 equal semi-annual payments. If the interest rate is 12%, compounded semiannually, what is the size of each payment?

a)

$1288.29

b)

$3488.29

c)

$675.34

d)

$1433.45

43.

A couple who borrow $90,000 for 30 years at 7.2%,

compounded monthly, must make monthly payments of $610.91.

(a) Find their unpaid balance after 1 year.

(b) During that first year, how much interest do they pay?

a)

(a) $89,120.53/ (b) $6451.45

b)

(a) $57,120.33/ (b) $7451.78

c)

(a) $8,340.59/ (b) $451.45

d)

(a) $9,720.63/ (b) $6451.45

44.

How much would have to be invested at the end of each year at 6%, compounded annually, to pay off a debt of $80,000 in 10 years?

a)

$6069.44

b)

$9069.44

c)

$7099.23

d)

$1062.89

45.

If $1000 is invested for 4 years at 8%, compounded quarterly, how much interest will be earned?

a)

$72.79

b)

$37.98

c)

$472.45

d)

$372.79

46.

f $15,000 is invested at 6%, compounded quarterly, how long will it be before it grows to $25,000?

a)

54.3 quarters

b)

67.3 quarters

c)

34.3 quarters

d)

14.3 quarters

47.

A young couple receive an inheritance of $72,000 that they want to set aside for a college fund for their two children. How much will this provide at the end of each half-year for a period of 9 years if it is deferred for 11 years and can be invested at 7.3%, compounded semiannually?

a)

$12,162.06

b)

$2,162.06

c)

$11,102.06

d)

$19,962.23

48.

If an investment of $1000 grew to $13,500 in 9 years, what interest rate, compounded annually, did this investment earn?

a)

33.53%

b)

23.53%

c)

30.93%

d)

3.93%

49.

Suppose you invest $100 at the end of each month in

an account that earns 6.9%, compounded monthly.

What is the future value of the account after 5.5 years?

a)

$999.41

b)

$7389.69

c)

$7999.41

d)

$4999.41

50.

Maxine deposited $80 at the beginning of each month for 15 years in an account that earned 6%, compounded monthly. Find the value of the account after the 15 years.

a)

$23,381.82

b)

$3,981.82

c)

$45,381.82

d)

$9,381.82

51.

What are some benefits to starting a savings account early?

a)

you can earn interest on money saved

b)

putting money aside will help avoid spending it on something else

c)

setting a savings goal will help

d)

all of the above

52.

When opening a savings account or planning your budget, which unexpected expenses should you consider?

a)

home repair

b)

car repair

c)

medical expenses

d)

all of the above

53.

When you buy something you WANT, what should you consider before buying?

a)

where it will look best in my house

b)

will my friends like it as much as I do

c)

you might not have enough money for necessary spending (emergencies)

54.
What will you pay back if you borrow $
a)
principal only
b)
interest only
c)
interest and finance charges
d)
principal + interest
55.
Which of the following is an example of a fixed expense?
a)
Rent
b)
Groceries
c)
Gas
d)
Clothes
56.
Money owed to a person or a business
a)
Debit
b)
Credit
c)
Debt
d)
Late Fee
57.
What is personal finance?
a)
 a budget
b)
 income and expenses
c)
 savings account
d)
all of the above
58.
What is income?
a)
a resource necessary to survive
b)
a balance of your income and spending
c)
money earned
59.
What is an expense?
a)
resources not necessary to survive
b)
resources necessary to survive
c)
money used on needs and wants
60.
What is a variable expense?
a)
an expense whose price changes over time
b)
an expense whose price does not change over time 
c)
money used on needs and wants

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