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FINA-523 Summer 2011 - First Quiz Chapters 1 thru 4 1. You need to review your progress, reevaluate, and revise your plan (step 5) because A) your financial needs change over your lifecycle B) your employment situation changes from time to time C) your net worth will change over time D) your family situation may change from time to time E) all of the above are good reasons to periodically review your financial plan 2. Claudia has $4,500 automatically deducted for insurance from her annual salary of $60,000. Additionally $7,500 is deducted each year in taxes. When preparing her personal income statement, what figure should Claudia enter for her income? A) $55,500 B) $48,000 C) $52,500 D) $60,000 3) Your money grows faster as the compounding period becomes longer. TRUE/FALSE 4. How much can you borrow today if you can make payments of $3,600 a year for the next five years and the interest rate is 10%? A) $13,646.83 B) $12,235.32 C) $18,978.36 D) $15,797.84 E) $17,949.67 5. You and your spouse have earned salary and wages of $41,750. In addition you have municipal bond interest income of $600 and savings account and certificate of deposit interest income of $800. You paid a total of $600 in interest on your car loan. Using only this information, what is your total income for tax purposes? A) $43,150 B) $42,550 C) $42,350 D) $41,750 E) none of the above 6. If your liabilities are greater than the value of your assets you are considered A) unstable. B) bankrupt. C) insolvent. D) unbalanced. Richard and Katarina Bajorshik Katarina and Richard are a busy young couple with a son, Caleb, who is 6 and twin daughters, Stacy and Casey, who are actively exploring the world as four-year-olds. Before the twins were born, Katarina and Richard bought their first home with plenty of indoor and outdoor space for a growing young family. The Bajorshiks are concerned about their 2008 tax issues, but they are also committed to planning for the future of their family. Next year Richard should be able to pay off the remaining balance of his law school student loans. Contributing to Richard's Roth IRA is an annual priority. The following information reflects tax year 2008.... View Full Document

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