1)Using one or more of the methods presented in this chapter, calculate the present value of $56000 to be received 14 years from today, discounted at 6 percent.

$27830

$26255

$23367

$24769

2)Daniel would like to save money to pay for his daughters college expenses. He estimates that he will need to accumulate $43000 over the next 10 years. How much will he need to invest at the end of each year for 10 years to achieve his savings goal if he can earn 7 percent per year on the investment and he makes end-of-year payments?

$2968

$2698

$3112

$2830

3)You are borrowing $63000 to buy a condo. If mortgage rates are currently at 9 percent and you take a 30-year loan with fixed payments, how much will your monthly mortgage payment be, assuming you make fixed payments at the end of each month?

$600

$648

$507

$553

4)Sandra currently works as a manager of an electronics store earning an annual salary of $130000. She noticed an internal job opening for a regional manager that pays $260000 salary, but an MBA is required for consideration. The cost for a full-time MBA program in two years is $140000. What is her opportunity cost for attending graduate school full-time, without consideration for time value of money?

$280000

$260000

$540000

$400000

5)If you must seek advice from a number of people before making a decision, you would be considered a (an)

external decision maker.

intuitive decision maker.

rational decision maker.

internal decision maker.

6)Donald expects to conduct several transactions with his financial planner over the next year. In addition to a financial plan ($2300), he will also facilitate the creation of a will ($1100) and a trust ($600), and make 40 50 trades ($45 each). If Donald has $190000 in assets and the financial planner offers a fee-based plan at 3% of assets, what should Donald do?

Create his own legal documents.

Defer financial planning documents until he can afford to pay the fee to the financial planner.

Choose the fee-only plan.

Choose the fee-based plan.

7)Rosa graduated at the top of her high school class, and has set the following goal as part of her financial plan:"graduate from college with a B.S. in Business Management." Which aspect of the SMART goal model is missing from her goal?

The goal is not attainable.

The goal is not specific.

The goal is not time-specific.

The goal is not measurable.

8)The Federal Reserve often __________ the __________ rate to stimulate the economy.

lowers; prime

raises; federal funds

raises; prime

lowers; federal funds