3. Would you rather have a savings account that offered simple interest, or an account that offered compound interest? Why? (3-6 sentences. 2.0 points) An account that offered compound interest.
Assignment 4: Saving and Investing (32.0 points) 1. Describe a real or made up but realistic situation that could cause you or someone you know to have to use money from a financial reserve. (3-6 sentences. 2.0 points) If someone were to have a sudden, serious illness that required a long hospital stay with large medical bills and left them unable to work, they would have to use money from a financial reserve like a savings account or a 401k plan to pay the bills. 2.
2. How many months' worth of expenses do you think your financial reserve should include? Describe at least two reasons for this decision. (3-6 sentences. 2.0 points) Fully funded emergency fund of 3-6 months of living expenses.
3. Would you rather have a savings account that offered simple interest, or an account that offered compound interest? Why? (3-6 sentences. 2.0 points) I would prefer a savings account that offered compound interest.
3. Would you rather have a savings account that offered simple interest, or an account that offered compound interest? Why? (3-6 sentences. 2.0 points) I would rather have a savings account that offered compound interest.
How many months' worth of expenses do you think your financial reserve should include? Describe at least two reasons for this decision. (3-6 sentences. 2.0 points) * You should have a fully funded emergency fund of 3-6 months of living expenses. The reason for building up this reserve?
In a money market account you invest your money in low risk investments with predictable interest rates. What is a liquidation policy? (0.5 points) A liquidation policy tells you when and how you’re able to remove money from the account. What is simple interest? (0.5 points) Simple interest is gained only on the principal amount of an account.
3. More access to your funds. You don't have to be superseded by the company plan. Disadvantages for a Roth 401k rollover into a Roth IRA. You have an income limit with new contributions.
1What is simple interest? (0.5 points) interest gain only by the amount in the account. What is compound interest? (0.5 points) interest that gains its own interest. What is the time value of money?
1. If you are borrowing money and paying interest, would you prefer an interest rate that compounds annually, quarterly, or daily? Why? (2-4 sentences. 1.0 points) Lesson 1-slide 4 Assuming the same rate, annually.