Exam 1: Personal Financial Planning: An Introduction

What is the future value of $20,000 received today, after 10 years if it is invested at 6% compounded annually for the next six years and 5%, compounded semi-annually for the remaining four years?

Opportunity costs refer to time, money, and other resources that are given up when a decision is made.

A financial plan is also known and referred to as a budget.

Your life situation is affected by which of the following?

Economic Factor: Housing starts measures?

A higher opportunity cost implies a lower current value.

An individual invests $9,000 at a rate of 6% per annum.What will be its value in 11 years' time?

Changes in interest rates don't affect your financial planning.

If a person deposited $10,000 earning 9 percent for 11 years, this would involve what type of computation?

Reduced funds available for investment in our economy could result from

Increased demand for a product or service will usually result in lower prices for the item.

Economic Factor: Consumer prices measures?

Analyzing your current financial position is a part of the first stage of the financial planning process.

Life situation Young dual income no children What are your specialized financial activities?

The main economic influence that determines prices is:

Household size is a major influence on personal financial planning decisions.

Economic Factor: Money supply measures?

Risks associated with most financial decisions are difficult to measure.

Future value calculations consider:

Time value of money refers to changes in consumer spending when inflation occurs.