Personal Finance Essay

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Assignment 4 (32 points) Assignment 4: Saving and Investing Instructions Save this file in your course folder, and name it with Assignment, the section number, and your first initial and last name. For example, Jessie Robinson's assignment for Section 1 would be named Assignment1JRobinson. Type the answers to the assignment questions below. Use complete sentences unless the question says otherwise. You will have more than one day to complete an assignment. At the end of each day, be sure to save your progress. Review Lesson 4 of the Course Overview for instructions about turning in your assignments. Assignment Questions 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) Maybe if a business owner went bankrupt, and they lost everything. Only in this situation would I see someone dipping into their retirement fund early. 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. The reason for building up this reserve. With this reserve you're building your safety net against major life events so that you never have to go into debt again. 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 just because I am familiar with them and I feel like they are very simple to use. 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 prefer annual compounding because it seems

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