Personal Finance Assignment 4

1119 Words5 Pages
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) * 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. 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? With this reserve you're building your safety net against major life events so that you never have to go into debt again. When you have your 3-6 months saved there aren't very many things that can happen that you can't pay cash for outright. 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) * Compound interest. Over time the compound interest will build up more interest in the account. In time, the interest generates

More about Personal Finance Assignment 4

Open Document