1. How much will I have to save beginning today if interest is paid at the end of each year and is compounded annually? I plan to save for for 45 years at which time I will retire. My target is to have $2 million dollars by the time I retire. Assume an investment rate of 4% .

a)17,524.91 b)18,232.22 c)22,344.10 d)16,524.91

2. A variable annuity is less risky than a fixed annuity to the annuitant. true or false

3. It is not worth buying dividend paying stocks for an IRA since only capital gains accumulate tax free. true or false

4. Households must take into account the expected real rate of return not the expected nominal rate of return when trying to calculate the amount they must save to achieve their financial goals. true or false

5. I am 40 years old. I plan to retire in 25 years. I am self-employed. I save via an IRA. I save $425 per month. The funds in the IRA are invested in the S&P 500 ETF. The stock symbol for the ETF is SPY. If the ETF appreciates at an average rate of 4% what will be the nominal value of the SPY at your retirement age?

a)418,250 b)325,000 c)763,000 d)218,505

6. 401-K retirement plans offer a risk free return on capital that is tax exempt. true or false

7. I have a credit card issued by Metro Bank. The card charges 29% interest APR. Interest is compounded daily. I use the card to pay for my text books. The cost of the books is $600. After 12 months what would be my credit card debt if I make payments of $40 at the end of each 30 day period.? Work with a 365 day year.

a)275 b)651 c)950 d)250