Question 2

You wish to fund your daughter's education via a Registered Education Savings Plan (RESP).If she will need $35,000 at the beginning of each year for 4 years starting 8 years from today, how much must you set aside each year, at the end of the year, until she leaves to pursue her studies? You already have $75,000 in her RESP. Assume her investments earn 3.5%, compounded quarterly. Round your final answer to the nearest dollar.

1. $14,666
2. $12,800
3. $3,734
4. $2,921

Question 3

Elsie is comparing her actual income and expenses to her budgeted amounts. She was pleased to see that her net income was higher than expected by $2,000 due to a job promotion, and for the most part her expenses matched her planned outflow, with the exception of the following:

Expense	Higher / (Lower) than planned
Utilities	($500)
Groceries	$1,000
Recreation	$500
Clothing	($400)

Which statement is true?

1. Elsie had a negative forecasting error of $1,400.
2. Elsie had a negative forecasting error $2,600.
3. Elsie had a positive forecasting error of $1,400.
4. Elsie had a positive forecasting error of $2,600.

Question 4

Craig's annual expenses total $50,000. His debt-to-asset ratio is 0.5. Total liabilities equal $42,000. If he maintains the recommended maximum emergency fund in liquid assets, what are his long-term assets?

1. $71,000
2. $59,000
3. $71,500
4. $100,000

Question 5

Vince's net income (line 23600) in 2022 was $85,000, while that of his common-law partner (they have lived together for over 1 year and have a child) was $7,000. The basic personal amount for 2022 was $14,398.

How much can Vince claim on Line 30300 of the Canada Income Tax and Benefit Return for the Spouse or Common-Law Partner amount? Please refer to Schedule 5 for 2022:

https://www.canada.ca/content/dam/cra-arc/formspubs/pbg/5000-s5/5000-s5-23e.pdf

1. $14,398
2. $7,398
3. $7,000
4. $1,110

Question 6

During 2023, Aiden earned $60,000 gross employment income from his position as a co-ordinator at GGF Mutual Funds. He and his employer each contributed $1,500 to his Registered Pension Plan (RPP), while Aiden also contributed $1,000 to a Registered Retirement Savings Plan (RRSP), $2,000 to a Tax-Free Savings Account (TFSA), and $500 to a First Home Savings Account (FHSA). Aiden also paid $700 in medical expenses. Aiden had no other tax deductions other than those arising from the foregoing.

What was Aiden's average Federal tax rate in 2023? Refer to 2023 Federal income brackets and rates below.

Income Bracket	Marginal Tax Rate
0 - $53,359	0.15
$53,360 - $106,717	0.205

1. 15.00%
2. 15.01%
3. 15.35%
4. 15.41%

Question 7

Credit card A charges an annual effective interest rate of 21.56% and a $100 annual fee. If your average outstanding balance is $2,000, how much would you save every year if you switched to credit card B that charges only 19.38% per year with a $200 fee?

1. $0
2. $56.40
3. $100
4. $125.62

Question 8

Isla and Glen have negotiated a 5-year conventional mortgage at a rate of 6.1%. The current Bank of Canada 5-year rate is 5.25%. Which rate will be used to determine their Gross Debt Service ratio under the stress test?

1. 2.0%
2. 5.25%
3. 6.1%
4. 8.1%

Question 9

Which statements are correct?

1. If you expect interest rates to rise, you would prefer a fixed-rate over a variable-rate mortgage.
2. You are likely to be charged a lower interest rate on a conventional mortgage than an insured mortgage.
3. On-reserve land is often the property of the First Nation, thus individuals can only mortgage and own the home.

1. I and II, only
2. II and III, only
3. I and III, only
4. I, II and III

Question 10

Jose has applied for a 25-year fixed rate mortgage. Her gross annual income is $132,000. Assume monthly mortgage, heating and property costs of $4,000 and monthly debt charges of $900. Will she qualify for the loan?

1. Yes, both the GDS and TDS fall within the norm.
2. Yes, as only the GDS is higher than the norm.
3. No, as only the TDS is higher than the norm.
4. No, both the GDS and TDS exceed the norm.