1) Consider the following statistics for a household's annual cash flow:

Net Cash Flow ($3,400); Nondiscretionary Expenses ($32,750); Discretionary Expenses ($9,250); Retirement Investments ($13,500) and Debt Repayment ($4750).

Calculate the Gross Savings percentage.

33.81%; 34.83%; 35.03%; or 34.01%.

2) The J. family has found that the current cost of attending college is $25,000 per year. How much lump sum amount they should have in their education account so that the 4 years of college is funded? Assume education inflation to be 6.25% and investment return to be 7.5% per year.

$95,122; $98,269; $97,549; or $97,127

3) J. bought a stock for $17 a share two years ago. The stock does not pay any dividends. Today Izzie sold the stock for $18.50 a share. What was his internal rate of return on this investment?

7.1%; 4.3%; 8.8%; or 6.2%

4) What is the difference in future value between savings in which $2,500 is deposited each year at the beginning of the period and the same amount deposited at the end of the period? Assume an interest rate of 5.25% per year and that both are due at the end of 12 years.

$2390; $1225; $2120; or $2012

5) S. is planning to retire in couple of years. He has estimated that his annual requirement at the beginning of the1st year of retirement would be $75,000 per year. He expects to live for 22 years after retirement. How much should be the accumulated (lump sum) amount in his retirement account at the beginning of retirement so that his post retirement period is funded. Assume inflation to be 2.5% and investment return to be 7.25% per year.

$1,048,636; $1,068,325; $1,021,011; or $1,021,399