Jena has been so excited about what she has learned in her personal finance class that she has been telling everyone You should take this class. Now her dormitory resident advisor has asked her to prepare a talk on credit and the young professional. She has decided to use a question-and-answer format. Help her answer the following questions.

1.Why is it easy for college students to get and use credit cards? Aside from the obvious impact of forgoing future consumption to repay the debt, how can students credit practices affect their financial future?

2.What are three debt and credit trends that suggest few people are practicing frugality?

3.What does it mean to determine your own borrowing capacity and stick to it? Why is this strategy necessary when choosing wealth?

4.What is the relationship between borrowing capacity and an emergency account? What is the advantage or disadvantage of using less liquid accounts for emergency savings and, in the event of an emergency, immediately relying on credit?

5.Why should women be particularly concerned about financial planning?

6.Review the 12 keys to success. Which strategies could you utilize to avoid bad debt?

7.Jena has decided to use the time value of money tools from Chapter 3 to calculate the size of the monthly payments that a typical undergraduate would need to make to pay off the average credit card debt $1,000 over 1 year (12 monthly payments), assuming an annual interest rate of 22.5 percent. If, instead of having to make that credit card payment, a new college graduate invested that same amount monthly for 1 year in a mutual fund earning 9 percent on average, how much would he or she have for retirement if she retained this amount in the account for the next 40 years?