Your Questions About Insurance Money Market Funds

Steven asks…

Help with Economics please?

I’m doing an assignment and I need somebody to check my answers and correct me if I’m wrong.

1. A certificate of deposit is best for
A. money you want to put aside for a few months or years.
B money you may need at a moment’s notice.
C retirement investing.
D storing mortgage payments.

B

2. You have a savings bond but no other savings or investments. You have $25 a month to start investing. The first thing you should do with it is
A start an emergency savings fund.
B determine an asset allocation plan.
C purchase a government bond.
D purchase shares of stock.

C

3. When shopping for a savings account you should look for one that offers
A annual fees.
B loyal customer fees.
C simple interest.
D compounding interest.

D

4. The best explanation for the general rise of prices over time is
A inflation.
B deflation.
C rising interest rates.
D declining interest rates.

C

5. You are concerned about inflation eroding your college savings. You should put your money in an account that offers
A an interest rate lower than inflation.
B an interest rate higher than inflation.
C low balance transfer fees.
D FDIC insurance.

A

6. An account designed for payment of regular bills is
A savings.
B money market.
C corporate bond.
D checking.

D

7. Your expenses exceed your income. You should cut back your
A fixed costs.
B variable costs.
C opportunity costs.
D budget.

B

8. The first step in creating a budget is determining your
A expenses.
B credit debt.
C income.
D tax bracket.

C

9. You earn $30,000 per year and the federal tax rate is 10%. Your gross income is
A $3,000
B $17,000
C $27,000
D $30,000

C

10. Anna’s net income is $40,000 per year. What is the most she should spend towards housing each year?
A $4,000
B $14,000
C $20,000
D $30,000

C

11. Your friend’s job pays $10 per hour and he works 40 hours per week. His tax rate is 20%. Assuming he works 50 weeks of the year his yearly gross income is
A $4,000
B $16,000
C $20,000
D $40,000

A

12. You choose to work instead of attending college after graduation. A benefit of this choice would be
A higher income potential.
B earning money now.
C the cost of tuition.
D more free time.

B

13. Utility refers to a person’s derived _____________ from consuming a good.
A scarcity.
B usefulness.
C satisfaction.
D opportunity cost.

B

14. Who would pay the least as a portion of income under a progressive tax?
A doctor earning $110,000 per year
B manager earning $45,000 per year
C athlete earning $2.5 million per year
D dishwasher earning $18,000 per year

D

15. Who would pay the most as a portion of income under a regressive tax?
A factory owner earning $90,000 per year
B grill master earning $10,000 per year
C economist earning $60,000 per year
D artist earning $20,000 per year

C

16. You earn $30,000 per year and paid 20% in taxes this year. The government decreased the tax rate to 10% for next year. Which will be your net income?
A $3,000
B $7,000
C $27,000
D $30,000

A

17. Imagine you live in a society with progressive taxation. Your friend makes double your salary and pays 20% in income taxes. Which rate most likely would be your income tax rate?
A 0%
B 10%
C 20%
D 30%

C

18. Some people would prefer a single income tax rate because it
A is easier to calculate.
B would increase the government’s revenue.
C means everyone would pay the same income percentage in taxes.
D would reduce the percent of income poorer families pay in income taxes.

C

19. “Tax bracket” is a term associated with which type of taxation?
A regressive
B proportional
C progressive
D flat

D

20. Which is most liquid?
A savings bonds.
B stock shares.
C certificates of deposit.
D cash.

D

21. To earn money, the rate of return on an investment must be higher than the
A rate of deflation.
B rate of inflation.
C interest rate.
D account fees.

D

22. You deposit all your saved money into a CD and have no other bank accounts. To save for emergencies you should
A purchase another CD.
B keep the money at home.
C deposit the money into a savings account.
D invest in a stock.

C

24. Diversification is important
A because money saved in a bank is not protected.
B so you do not pay more taxes to the government.
C in order to minimize risk and maximize return.
D to keep your financial documents orderly.

A

25. Your grandmother is nearing retirement. She currently has 90% of her savings in stocks and 10% in mutual funds. What would you recommend to her?
A Nothing; the money is allocated just right.
B Liquidate all assets and keep the cash at home.
C Shift highly aggressive investments into more conservative investments such as government bonds and a savings account.
D Move money from mutual funds into stocks.

C

admin answers:

You missed at least half the questions. I would take another look at:
1, 2, 4, 5, 9, 10, 11, 15, 16, 17, 19, 24. On 21 your answer could be correct, but I think they’re looking for another answer. Good luck.

Laura asks…

I have a Weird Income, and Need Help with Saving?

OK< so here's the deal. I have been working with my family for about 7 years now I'm 30 and have a 1 year old.

Back in 1989 my parents bough an apartment building and I have been running things for the most part since 2004, my dad is 93 and I help care for him with my mom who is still acting CEO, she's in her 60s. For my day to day work I earn $1,500 a month, I live rent free, and pay nothing but my car insurance, my few credit card bills (currently only about $2,000) and my life insurance.

So While I only earn $18,000 a year, I also don’t pay the usual bills. I have a unique living situation to say the least.

Recently I revolutionized our business which is earning us a lot more income. Basically I took 4 apartments aside and started a corporate housing venture. We are now putting those earnings from that venture into a seperate account.

My mom and I made a savings account in a small local bank, it’s so small and crappy they don’t have debit cards and only have 2 branches, so it’s a great place to keep money without dipping into it.

Currently it only has about $17,000. All of that is from the new venture, and made between August of last year and today, but I started the business last April with just one apartment, and have opened 3 more units for the venture, not to mention we have dipped into that money for some emergency repairs. Hopefully this translates in even greater earnings this year. Perhaps we can make up to $40,000 in just savings from those new units this does not include savings we usually put aside from our regular rentals,

That $16,000 is shared with my mom and we are thinking of putting it into a money market, BUT, my own savings are a different story.

I figure I can put $1,300 per month away in savings from the $1,500 I earn into a personal retirement fund.

I just opened a 529 for my son in Chase bank with $1,000 and will be putting about $260 in that every month. I will be going to Vanguard to open a Roth IRA putting the max in every year. Those two savings come to $8,120 plus I have a vacation fund which I’ll be putting $3,500 into every year (just a passbook savings account) which leaves me with $3,980 per year to play around with.

My question is, is this $3,980 enough to play around with so that I can make a nice amount of cash for my future? Or is it a tad anemic? Keep in mind the ROth IRA and the 529.

THanks for any help.
I only have $5,000 in my personal savings right now TOTAL (includes 1,000 in 529), and I will be getting about $4,000 as a refund soon so will use that to open my Roth IRA, hopefully before April 18. And the next 5k little by little over the next year after April 18.

admin answers:

You can build up a fairly nice amount of money with $3980 per year. If you put it into something like a stock fund and are able to get 8% growth from it per year (which is slightly below the long-term average gains for stocks), after 30 years that account would be worth about $450,000 (assuming you keep the dividends and capital gains in the account and let the growth compound over the years).

Compounding is very powerful over long periods of time. In about 9 years in the above scenario, your account would be worth about $50,000. At that point, the 8% growth per year will be more than the $3980 you are contributing so the value of the account will really start to grow.

Of course, stocks do not go up a steady 8% per year, so the value of the account will bounce up and down over time, but historically over long periods of time, stocks are the asset class with the best average annual gains, so for anyone with a long time horizon like you have, I personally think that’s the best place to put the money. If you go with something “safe” and only earn on average 4% per year, your total after 30 years would be only about $223,000, which might sound like a lot of money now, but after 30 years of inflation, it probably won’t seem like that much then.

Financial advisers generally suggest that you keep enough in a savings / money market account to cover any sudden unexpected bills (e.g car repairs, medical bills, something your child needs). I think the recommendation is generally 6 months worth of expenses, but since your situation is unusual I’m not sure that would be right for you.

Vanguard has some good mutual funds that you could use for your investment. You want one with no “load” (sales charge) and I think Vanguard has many like that. Personally, I would go with an index fund that tracks a major market index (S&P 500, Russell 2000, etc.) or even some kind of international index fund since I think future growth is probably going to be more in other countries than it is in the US.

George asks…

Investing in a 403B. Which percentage would you place of the following options and why? See fidelity list:?

I have all these choice names below… which would you pick and why? They all mean nothing to me. Would like to retire in 25 years.

* (Total must equal 100%) Total: 0%

Fund Name
FID STRAT DIV & INC
FID ASSET MGR 50%
FID CONVERTIBLE SEC
FID ASSET MGR 20%
FID ASSET MGR 30%
FID ASSET MGR 40%
FID ASSET MGR 60%
FID ASSET MGR 70%
FID ASSET MGR 85%
FID BALANCED
FID DYNAMIC STRAT
FID FREEDOM 2000
FID FREEDOM 2005
FID FREEDOM 2010
FID FREEDOM 2015
FID FREEDOM 2020
FID FREEDOM 2025
FID FREEDOM 2030
FID FREEDOM 2035
FID FREEDOM 2040
FID FREEDOM 2045
FID FREEDOM 2050
FID FREEDOM INCOME
FID GLOBAL BALANCED
%
FID PURITAN
FID STRAT REAL RET
%
FID CAPITAL & INCOME
%
FID CORPORATE BOND
FID FLOAT RT HI INC
%
FID FOCUSED HIGH INC
%
FID GNMA
FID HIGH INCOME
%
FID INFLAT PROT BOND
FID INST SH INT GOVT
FID INTERMED BOND
FID INTM GOVT INCOME
FID MORTGAGE SEC
FID NEW MARKETS INC
%
FID SHORT TERM BOND
FID STRATEGIC INCOME
FID TOTAL BOND
FID ULTRASHORT BOND
%
FIDELITY GOVT INCOME
FIDELITY INVST GR BD
FIDELITY US BD INDEX
SPTN INT TR INDX INV
SPTN LT TR INDX INV
SPTN ST TR INDX INV
FID GOVT MMKT
FID MONEY MARKET
FID SEL MONEY MARKET
FID US TREASURY MM
FIDELITY CASH RESRVE
FIDELITY RET GOVT MM
FIDELITY RETIRE MMKT
FIDELITY US GOVT RES
ABF LG CAP VAL INV
AF GRTH FUND AMER R4
CALAMOS GROWTH A
FID 130/30 LG CAP
FID BLUE CHIP GROWTH
FID BLUE CHIP VALUE
FID CAP APPRECIATION
FID CONTRAFUND
FID DISCIPLINED EQTY
FID DIVIDEND GROWTH
FID EQUITY INCOME II
FID EQUITY INCOME
FID EXP & MULTINATL
%
FID FIDELITY
FID FIFTY
FID FOCUSED STOCK
FID FOUR IN ONE IDX
FID GROWTH & INCOME
FID GROWTH COMPANY
FID GROWTH DISCOVERY
FID INDEPENDENCE
FID LARGE CAP GROWTH
FID LARGE CAP STOCK
FID LARGE CAP VALUE
FID LC CORE ENH INDX
FID LC GR ENH INDX
FID LC VAL ENH INDX
FID MEGA CAP STOCK
FID NASDAQ COMP INDX
%
FID OTC PORTFOLIO
FID STK SEL ALL CAP
FID TREND
FID VALUE DISCOVERY
FIDELITY MAGELLAN
SPARTAN 500 INDEX
SPTN TOTAL MKT INDEX
%
COLUMBIA ACORN Z
FID GR STRATEGIES
%
FID LEVERAGED CO STK
%
FID MID CAP ENH INDX
%
FID MID CAP GROWTH
%
FID MID CAP STOCK
%
FID MID CAP VALUE
%
FID VALUE
FIDELITY LOW PR STK
%
FIDELITY NEW MILLEN
SPTN EXTND MKT INDEX
%
FID SM CAP DISCOVERY
%
FID SM CP ENH INDX
%
FID SMALL CAP GROWTH
%
FID SMALL CAP STOCK
%
FID SMALL CAP VALUE
%
FID STK SEL SM CAP
%
FID VALUE STRATEGIES
FID CANADA
%
FID CHINA REGION
%
FID DIVERSIFIED INTL
%
FID EMEA
%
FID EUROPE CAP APP
%
FID EUROPE
%
FID INTL CAP APPREC
%
FID INTL DISCOVERY
%
FID INTL ENH INDEX
%
FID INTL GROWTH
%
FID INTL SM CAP OPP
%
FID INTL SMALL CAP
%
FID INTL VALUE
%
FID JAPAN SMALLER CO
%
FID JAPAN
%
FID LATIN AMERICA
%
FID OVERSEAS
%
FID PACIFIC BASIN
%
FID SOUTHEAST ASIA
%
FID TOTAL INTL EQ
%
FID WORLDWIDE
%
FIDELITY EMERG MRKTS
%
FIDELITY NORDIC
%
SPARTAN INTL INDEX
%
FID INTL REAL ESTATE
%
FID REAL ESTATE INC
%
FID REAL ESTATE INVS
%
FID SEL AIR TRANSPRT
%
FID SEL AUTOMOTIVE
%
FID SEL BANKING
%
FID SEL BIOTECH
%
FID SEL BROKERAGE
%
FID SEL CHEMICALS
%
FID SEL COMM EQUIP
%
FID SEL COMPUTERS
%
FID SEL CONS DISCR
%
FID SEL CONS STAPLES
%
FID SEL CONSTR/HOUSE
%
FID SEL DEFENSE
%
FID SEL ELECTRONICS
%
FID SEL ENERGY SVCS
%
FID SEL ENERGY
%
FID SEL ENV ALT ENGY
%
FID SEL FINANCIAL
%
FID SEL GOLD
%
FID SEL HEALTHCARE
%
FID SEL HOME FINANCE
%
FID SEL INDUST EQUIP
%
FID SEL INDUSTRIALS
%
FID SEL INSURANCE
%
FID SEL IT SERVICES
%
FID SEL LEISURE
%
FID SEL MATERIALS
%
FID SEL MED EQ & SYS
%
FID SEL MEDICAL DEL
%
FID SEL MULTIMEDIA
%
FID SEL NATURAL GAS
%
FID SEL NATURAL RES
%
FID SEL PHARMACEUTCL
%
FID SEL RETAILING
%
FID SEL SOFTWARE
%
FID SEL TECHNOLOGY
%
FID SEL TELECOMM
%
FID SEL TRANSPORT
%
FID SEL UTILITIES
%
FID SEL WIRELESS
%
FID TELECOM & UTIL
FID GLB COMDTY STK

admin answers:

Wow, I can’t believe your employer allows a list like that. It only confuses the employee more. Also, your question needs a little more background, primarily an understanding of your “risk tolerance”. That means how sensitive will you be to short-term price fluctuations? What if your portfolio was expected to produce an annual return of about 8% over the very long run, but wouls be expected to decline as much as 20% occasionally? What would you do if that decline occured almost immediately? This is the reality of all investing.

Now, you’ve indicated a time horizon of 25 years, which is good, so I’ll assume you’re going to have moderate risk tolerance and should be invested with a bit of a tilt toward long-term growth. The conservative alternative is to invest in things that only fluctuate slighly, limiting your risk in any given year, but also greatly diminishing the expected return of the portfolio over the very long run.

A reasonable portfolio would be 65% equities, 25% bonds, 10% “other”. Break that up as follows:

Equities:
25% US large cap
10% US small cap
10% Foreign developed countries
20% Foreign emerging markets

Bonds:
10% Corporate
10% US treasury long-term
5% US treasury short-term

Other:
5% gold
5% real estate

Sharon asks…

can you please answer these questions if they are true or false?

1.compound interest is calculated on both deposits made and prior interest earned
2.with sample interest,the APY is the same as the stated interest rate
3.money market accounts generally have higher interest rates and more restrictions than ordinary savings accounts
4.interest earned on savings bonds in exempt from federal tax
5.with a long timeline you can invest in less liquid more volatile and riskier investments
6.the mainadvantage of ESOP plans is thier diversity
7.a trend of risking stock prices is called bull market
8.bonds with the lowest risk cary a rating either AAA or Aaa
9.a mutual fund is considered no-load if it is not loaded with under performing stocks or junk bonds
10.in most states it is illegal not to have a minimum amount of auto insurance coverage
11.under the principle of indemnity you will only recieve the current value of the insured item instead of what it cost you to purchase it
12.a higher deductible will usually mean a lower premium
13.it is more expensive to buy individual health insurance than to participate in a group plan
14.an umbrella policy is how the government refers to a flood insurance policy
15.the cash value of permanent life insurance is always equal to its face value.

admin answers:

Better get busy on your homework assignment, I doubt if anyone will do your work for you…

Ruth asks…

Need help with these math problem here?

Interest rates

1) An insurance fund invests $ 100,000 in municipal bonds and earns 7% per year on the investment. How much money is earned per year?

A. $ 142,857
B. $ 70,000
C. $ 7000
D. $ 1,428,571

2) A lab technician has 319 ml of a solution of water and acid. 4% is acid. How many milliliters are acid?

A. 9.57 ml
B. 15.95 ml
C. 127.60 ml
D. 12.76 ml

3) A chemical solution contains 4% salt. How much salt is in 4 ml of solution?

A. 10 mL
B. 1.6 mL
C. 0.16 mL
D. 100 mL

4) Juliette forgot to study for a test. Of the 200 question on the test, she answered only 35% correctly. How many question did she answer correctly?

A. 70
B. 85
C. 35
D. 50

5) Alex and Juana went on a 30-mile canoe trip with their class. On the first day they traveled 27 miles. What percent of the total distance did she answer correctly?

A. 100%
B. 1%
C. 90%
D. 0.9%

6) Matthew has saved a total of $ 39,000, of which $ 3900 is invested in the stock market. What percent of his total savings is invested in the stock market?

A. 5%
B. 20%
C. 10%
D. 15%

7) In Little League, Andrew hit 5 home runs in 25 at bats. What percent of the at bats were home runs?

A. 18%
B. 25%
C. 20%
D. 30%
8) A banquet dinner is being organized by a club. The actual cost of the dinner is $ 16 per person. The members are to pay $ 4 to attend, with the club making up the difference. What percentage of the dinner’s cost is the member to pay?

A. 17%
B. 25%
C. 15%
D. 20%

9) In basketball, Matthew made 255 baskets in 600 attempts. What percent of his attempts were made?

A. 43 1/2%
B. 42 1/2%
C. 43%
D. 41%

10) Matthew has $ 5000 invested in the stock market. This amounts to 25% of his total savings. How much has Matthew saved?

A. $20,010
B. $ 200,000
C. $ 20,000
D. $ 20,100

Compound Interest

Find the simple interest. Round your answer to the nearest cent.

1) Principal = $ 500
Interest Rate = 10%
Time in years = 5

A. $ 25.00
B. $ 1000.00
C. $ 250.00
D. $ 10.00

2) Principal = $ 2900
Interest Rate = 1 1/2%
Time in years = 8

A. $ 156.00
B. $ 15.60
C. $ 243.75
D. $ 69.33

3) Principal = $ 2900
Interest Rate = 7.8%
Time in years = 1/12

A. $ 18.85
B. $ 188.50
C. $ 226.20
D. $ 1.89

4) Principal = $ 3200
Interest Rate = 5 1/2%
Time in years = 8
A. $ 1548.80
B. $ 1408.00
C. $ 14,080.00
D. $ 1280.00

Assume that simple interest is being calculated in each case. Round your answer to the nearest cent if necessary.

5) Annie’s cafe borrows $ 8300 at 8% for 150 days. Find the total amount that must be repaid after 150 days.

A. $ 11,028.77
B. $ 8327.29
C. $ 8964.00
D. $ 8572.88

6) John forgot to pay his $ 397.00 income tax on time. The IRS charged a penalty of 15% for the 63 days the money was late. Find the penalty that was paid. ( Use a 365 day year.)

A. $ 10.12
B. $ 2.61
C. $ 407.28
D. $ 10.28

7) Robert Hall opened a taxi service company. To pay for start up costs, he borrowed $ 74,000 from a bank at 6% for 1 year. Find the interest.

A. $ 444.00
B. $ 5180.00
C. $ 78,440.00
D. $ 4440.00
2) Principal = $ 1300
Interest Rate = 1 1/2%
Time in years = 8

A. $ 156.00
B. $ 15.60
C. $ 243.75
D. $ 69.33

5) Annie’s cafe borrows $ 8300 at 8% for 150 days. Find the total amount that must be repaid after 150 days.

A. $ 11,028.77
B. $ 8327.29
C. $ 8964.00
D. $ 8572.88

admin answers:

Wow! Is this your homework? It takes longer to type it in than it takes to do it.

1) An insurance fund invests $ 100,000 in municipal bonds and earns 7% per year on the investment. How much money is earned per year?

100,000*7/100 = 7,000
C. $ 7000

2) A lab technician has 319 ml of a solution of water and acid. 4% is acid. How many milliliters are acid?
319 * 4/100 = 12.76
D. 12.76 ml

3) A chemical solution contains 4% salt. How much salt is in 4 ml of solution?
4 * 4/100 =16/100 = 0.16
C. 0.16 mL

4) Juliette forgot to study for a test. Of the 200 question on the test, she answered only 35% correctly. How many question did she answer correctly?
200*35/100 = 70
A. 70

5) Alex and Juana went on a 30-mile canoe trip with their class. On the first day they traveled 27 miles. What percent of the total distance did she answer correctly?
What question was asked of Juana Heheheheee! You mean what % was travelled on 1st day
27/30*100/1 = 90%
C. 90%

6) Matthew has saved a total of $ 39,000, of which $ 3900 is invested in the stock market. What percent of his total savings is invested in the stock market?
3900/39000*100/1 = 10
C. 10%

7) In Little League, Andrew hit 5 home runs in 25 at bats. What percent of the at bats were home runs?
5/25*100/1 = 20
C. 20%
8) A banquet dinner is being organized by a club. The actual cost of the dinner is $ 16 per person. The members are to pay $ 4 to attend, with the club making up the difference. What percentage of the dinner’s cost is the member to pay?
4/16*100/1 = 25
B. 25%

9) In basketball, Matthew made 255 baskets in 600 attempts. What percent of his attempts were made?
255/600*100/1 = 42.5
B. 42 1/2%

10) Matthew has $ 5000 invested in the stock market. This amounts to 25% of his total savings. How much has Matthew saved?
5000/25*100= 20000
C. $ 20,000

Compound Interest
Find the simple interest. Round your answer to the nearest cent.

1) Principal = $ 500
Interest Rate = 10%
Time in years = 5
500*10/100*5
C. $ 250.00

2) Principal = $ 2900
Interest Rate = 1 1/2%
Time in years = 8
2900*1.5100*8 = 348 (simple interest)
None of them TYPO IN INPUT??

3) Principal = $ 2900
Interest Rate = 7.8%
Time in years = 1/12
2900*7.8/100*1/12 = 18.85
A. $ 18.85

4) Principal = $ 3200
Interest Rate = 5 1/2%
Time in years = 8
3200*5.5/100*8
B. $ 1408.00

Assume that simple interest is being calculated in each case. Round your answer to the nearest cent if necessary.

5) Annie’s cafe borrows $ 8300 at 8% for 150 days. Find the total amount that must be repaid after 150 days.
WHAT!!!! Annie is crazy, tell her to get a credit card at 22% PER YEAR
8300*8/100*150/365 = 272.88 at 8% PER YEAR
No correct answer More typos?

6) John forgot to pay his $ 397.00 income tax on time. The IRS charged a penalty of 15% for the 63 days the money was late. Find the penalty that was paid. ( Use a 365 day year.)
297*15/100*63/365 = 10.278
D. $ 10.28

7) Robert Hall opened a taxi service company. To pay for start up costs, he borrowed $ 74,000 from a bank at 6% for 1 year. Find the interest.
74000*6/100 = 4400
D. $ 4440.00

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