Vocabulary 1 (Ch. 10.1 - 10.3)
Definition: A person nearing the end of their working life and holds a part-time job.
Semi-Retired
Definition: The death rate for a person's age group.
Mortality Rate
You stumble upon a job that offers you a pension for retirement. If you work for 30 years and have an avg. salary of $85,000 over that timespan, what will your annual pension payment AND monthly pension payment be?
Use the following formula to help calculate your annual pension payment: A = Number of Years Worked (x) Avg. Salary (x) 2%
Annual Pension Payment = $51,000
Monthly Pension Payment = $4,250
Annual Payment: 30 years (x) $85,000 (x) 0.02 → $51,000
Monthly Payment: Annual Payment ÷ 12 → $51,000 ÷ 12 = $4,250
In 2000, the amount of earnings required to earn one Social Security credit was $780. In 2025, that number has gone up to $1,810. What is the percent increase in the amount required to earn one Social Security credit from 2000 to 2025? Round to the nearest hundredth percent.
Use the formula for percent increase: (New $ - Original $) ÷ Original $
Percent Increase = 132.05%
($1,730 - $780) ÷ $780 = 1.3205 = 132.05%
If you were to go bowling with some friends and you wanted to earn a perfect score, how many consecutive strikes would you have to bowl to earn a 300?
A) 8
B) 10
C) 12
D) 15
C) 12
Definition: A retirement savings plan that is sponsored and set up by an employer for its employees; max. contributions are $23,000 annually.
401(k)
Definition: Describes how fast a person's investment can be converted into cash, if necessary.
Liquidity
An Insurance Company offers term life insurance for their customers and is renewable every year. In the first year, the premium is $115. Premiums increase 6% each year from there-on.
Question: What will be the cost of term life insurance policy in the 5th year? Use the following formula to help you solve and round to the nearest penny: A = P (1 + r)t
Premium = $145.18
A = $115 (1 + .06)4 = $145.18
In the 5th year does NOT mean 5 years from now. In the 1st year, Premiums are $115. In the 2nd year (aka, time = 1 year later), Premiums will be 6% more expensive. In the 3rd year (aka, time = 2 years later), Premiums will have increased another 6%. And so on.
You're planning on setting up a $55,000 investment portfolio. You decide to invest 20% in stocks, 25% in a high yield savings account, 15% in Crypto, and the rest in a Certificate of Deposit (CD).
Question: How much money did you put into your CD?
Amount of Money in CD = $22,000
40% of the $55,000 is invested into a CD. Multiply 0.40 and $55,000 and you get $22,000
Which character from Overwatch, when using their Ultimate Ability, will shout, "It's High Noon" and fire up to 6 rounds from their revolver?
A) Cassidy
B) Pharah
C) Soldier 76
D) Genji
A) Cassidy
Definition: These are the "building blocks" to determine if you've worked long enough to qualify for social security benefits.
Social Security Credits
Definition: A type of insurance that provides protection for the policyholder; usually covers the policyholder for a specified period of time, such as 5, 10, or 20 years.
Term Life Insurance
You decide to purchase universal life insurance with a face value of $100,000. The current cash value of the policy is $9,425 and the premium is $139 per month.
Question: If you decide to take a break from paying your premiums, what will the new cash value of the policy be if you didn't pay your premium for 1 full year? (Assume there's no interest added to your cash value)
Cash Value = $7,757
Step 1: Calculate 1 year's worth of premium. [ $139 (x) 12 months = $1,668 ]
Step 2: Take the difference of 1 year's worth of premium pay and the current cash value to get the new cash value. [ $9,425 - $1,668 = $7,757 ]
You're planning on setting up a $60,000 investment portfolio. You decide to invest 20% in stocks, 35% in a high yield savings account, 15% in Crypto, and the rest in a Certificate of Deposit (CD).
Question: If you make a 25% positive return on your stocks this year, what will the total value of your stock portfolio be worth (original amount you deposited + the 25% growth)?
Total Value of Stock Portfolio = $15,000
Step 1: Calculate 20% of $60,000. [ 0.20 (x) $60,000 = $12,000 ]
Step 2: Calculate 25% growth of your Stock Portfolio. [ $12,000 (x) 0.25 = $3,000 ]
Step 3: Combine the original amount and the growth for the year. [ $12,000 + $3,000 = $15,000 ]
Which word is spelled incorrectly?
A) Absence
B) Accommodate
C) Familiar
D) Plagarism
E) Vacuum
D) Plagarism (supposed to be Plagiarism)
Definition: When you earn the right to a future payment.
Vested, or Vesting
Definition: Describes the situation in which investors put their money into different types of investments to avoid being subject to the potential volatility of one single investment or stock.
Diversify
As a senior in high school, you decide to plan for your retirement at the age of 18. You open a traditional retirement account that pays 4.5% interest compounded monthly. If you regularly make monthly deposits of $200, how much will you have in the account by the time you retire at 65 years old?
Use the following formula to calculate the future value of a periodic investment: https://slideplayer.com/slide/2518677/9/images/3/Future+value+of+a+periodic+deposit+investment.jpg
Future Amount of Money = $387,032.48
P = $200, r = 0.045, n = 12, t = 47 years. Plug the numbers into the formula and you should get $387,032.48
If you want $1,250,000 when you retire, how much do you have to deposit into a retirement account, over and over again, on an annual basis, with an account that earns 9.1% interest compounded annually? Assume you want to retire in 30 years? Round to the nearest penny.
Use the following formula to calculate the present value of a periodic investment: https://slideplayer.com/slide/4673479/15/images/2/Key+Terms+present+value+present+value+of+a+single+deposit+investment.jpg
Periodic Principal Amount Deposited = $9,000.82
P = $1,250,000 (.091 ÷ 1) / ((1 + .091 ÷ 1) ^ 30 - 1) = $9,000.82
What is the most expensive item on the McDonald's menu in the entire world? Just a single item, no combos.
A) Big Tasty Smokey Double Bacon (Switzerland)
B) Grand Chicken Special (Lebanon)
C) Triple Cheddar and Double Beef Burger (France)
D) Mega Tokyo Burger (Israel)
B) Grand Chicken Special (Lebanon @ $27.19)
Source: https://news.yahoo.com/worlds-most-expensive-mcdonalds-menu-182708363.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAC4yiqq9JeWMEt-uGuAHe1-V6SmBGiRXJS8i5TAiZbHjzw3zUBF5XQzEVYESz0Z_ChU57V4KQaoUPOHXmU9S8cd2WtSRAFO6D4bn_uBlrzBw8vWkeXN19YBTHS06OxmpbOe8RjsVhO-3I9XCYNDfXx2jhpyPw9auflcLA51db8ZN
Definition: A monetary sum paid in one large single payment, instead of spreading it out over several payments.
Lump-Sum Payment
Definition: A person chosen by the policyholder whose name is on the life insurance policy and who receives the benefits of the policy after the policyholder's death.
Beneficiary
Your job is offering you a pension totaling 2.5% of the average of your last 3 years' annual salaries. It's the beginning of 2025 now and you plan on retiring at the end of 2027. In 2025, you made $63,600 annually and your salary increased 6% for 2026 and 10% in 2027 (*both increases are in reference to your 2025 salary).
Question: If you worked at your job for 25 years, how much money will you collect from your job in annual retirement benefits? Use the following formula to calculate your Annual Pension Payment: Pension = Number of Years Worked (x) Avg. Salary (x) Percent Multiplier your job is offering to pay
Annual Retirement Benefit = $41,870 per year
Step 1: Find the annual salaries for 2025 - 2027. [ 2025 = $63,600. 2026 = $63,600 (x) 1.06 = $67,416. 2027 = $63,600 (x) 1.10 = $69,960. ]
Step 2: Find the average of the three salaries. [ ($63,600 + $67,416 + $69,960) ÷ 3 = $66,992 ]
Step 3: Take 2.5% of the average of the Average Salary and multiply it with the Number of Years you worked. [ $66,992 (x) 0.025 (x) 25 years = $41,870 ]
You invested $300,000 into stocks, crypto, and real estate. The percentages of how the $300,000 was utilized is as follows:
Stocks = 35%, Crypto = 15%, Real Estate = 50%
If the overall amount that you invested into your stocks profited 30%, and the overall amount you invested into crypto profited 90%, and the overall amount you invested into real estate properties profited 40%, what is the total amount of money you gained from all three investments? (Profits only)
Total Profits = $132,000
Step 1: Calculate the profit for each investment. [ Stocks → $300,000 (x) 0.35 (x) 0.30 = $31,500 ]
[ Crypto → $300,000 (x) 0.15 (x) 0.90 = $40,500 ]
[ Real Estate → $300,000 (x) 0.50 (x) 0.40 = $60,000 ]
Step 2: Combine the profits from each investment. [ $31,500 + $40,500 + $60,000 = $132,000 ]
Since we're talking about retirement, it would be fitting to know the names of a few companies that you might want to invest in. Which of the following 2 Stock Symbols DO NOT match the company's profile in the stock market?
A) Petco - BARK
B) Harley Davidson - HOG
C) Olympic Steel - ZEUS
D) Budweiser - BEER
E) Heineken - HEINY
A) Petco - BARK (Actual Symbol - WOOF)
D) Budweiser - BEER (Actual symbol - BUD)