Unit quiz: Long Horizons, Payslips, Containers, and the One-Page Plan

Check understanding, separately from reading

5 questions · 80% to pass · no timer. This quiz checks the lessons in this unit. These authored questions assess recognition and application of the taught distinctions, not professional qualification. You may review the lessons and retry. Repeat attempts reuse the question bank; a remembered answer is not proof of transfer to a new situation.

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Question 1

A household has the same $80,000 of capital either way. Buying a $400,000 home with it produces ownership equity of $234,028.95 after ten years under 3% appreciation and an assumed 6% selling cost; renting and investing the difference produces $231,273.51 at an assumed 5%. Ownership wins by $2,755.44. What does that margin actually tell the household?That the two paths are close to a tie under those assumptions, so the decision belongs to the assumptions and to any non-financial preference, not to the arithmeticThat buying is the better financial choice, because ownership produced the larger figure and the difference is positive

Question 2

A projection shows a balance of $1,000,000 in thirty years and states that a household's retirement goal is funded. The goal was written as $60,000 a year of spending in today's money. At an assumed 2.5% inflation, what has gone wrong and what is the corrected comparison?Nothing is wrong, because inflation reduces the value of future dollars for the household and for its spending equally, so the units cancelThe two figures are in different units; $1,000,000 in thirty years is about $476,742.69 in today's purchasing power, which has to be compared with the real goal

Question 3

A mid-career worker receives a 3% nominal pay increase on a $5,000 monthly gross, while prices rise 2.5%. The same worker contributes $600 a month to a retirement container and is in a 22% marginal income tax bracket. Which statement is correct?The raise is worth $5,024.39 in real terms, a real gain of about 0.49%, and a 6% deferral would reduce income tax but not payroll taxThe raise is worth $5,150 in real terms and the deferral reduces both income tax and payroll tax, so the container is worth more than the bracket implies

Question 4

A household holds a three-month reserve of $10,890 in cash and owes $12,000 on a card at an assumed 24%, where the monthly interest is $240. A relative says the reserve should be emptied into the card immediately because the debt costs more than the reserve earns. What is the honest comparison?The reserve's forgone return against the card's interest, which shows the card costs more and settles the question in favour of emptying the reserveThe certain interest saving against the cost of losing liquidity, including the expected cost of borrowing if a shock arrives while the card balance is still high

Question 5

A plan funds a $600,000 goal from a tax-deferred retirement container. The projection shows $553,407.30 accumulated and calls the goal met. An assumed 22% tax rate will apply at withdrawal. What is the corrected finding, and what would change it?The after-tax value is $431,657.70, a shortfall of $168,342.31, and a Roth container would produce the same figure if the contribution-year rate were also 22%The after-tax value is $486,998.43, a shortfall of $113,001.57, because the withdrawal rate applied to a retirement container is the lower rate

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