Assignment Paper 4

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Assignment 4 Assignment4TRobinson 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 you break your arm and you have to go to the hospital that is a financial reserve. Nobody expects to end up in the hospital with a sky high bill. A broken arm is very unexpected so is a unexpected hospital bill. 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) It probably will be 3 months. You can lose your job and have no money saved up. You also probably will need 3 months because it is plenty time for you to get back on your feet. 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 like compound interest because that is money piling up. I would always like more money than money staying the same. Compound interest is always better. 4. If you were opening a savings account with compound interest, would you prefer an account that offers annual compounding, quarterly compounding, or daily compounding? Why? (3-6 sentences. 2.0 points) I would like a quarterly compounding because my interest can pile up every 3 months. My interest can also help me if I own an account. I can also get money faster with quarterly compound. 5. Which strategy for saving do you think would work best for you? Why? (3-6 sentences. 2.0 points) Spending wisely because you can’t pay yourself first if you have bills. When you spend wisely you think about your financial situations and buy what you need. Spending
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