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)
Like having to get a car. Another situation could be house repairs.
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)
6 months because I might loose my job. It will make me go into my financial reserve. Another thing that could make me go into financial reserve is having to pay medical bills .Somebody getting sick in the family.
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. As time passes, even if no deposits are made to the account the amount sitting in there can just keep gaining more and more interest. It does so at a faster rate than an account offered with simple interest so this seems much more appealing.
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 want an account that offers quarterly compounding so I can continue putting money in my bank so that interest will grow on it. Although I am not sure what I will choose when I am older, I think this one sounds the best and most intriguing. I just want to have a lot of interest on my savings account as I grow older.
5. Which strategy for saving do you think would work best for you? Why? (3-6 sentences. 2.0 points)
an automatic monthly transfer from checking to savings on my banks website. That way I won't forget and spend that money on something.
6. Describe two financial goals that you would want to meet before you begin investing. Explain why you would want to...