multiple choice test questions….

### 1. How much money would you have to invest today, at an interest rate of 5% in order to reach your goal of $1,000,000 in 30 years? Assume no additional money is invested.

Choose One • 20 points

- $123,737.45
- $321,377.45
- $231,377.45
- $132,733.45

### 2. What annual investment amount must be invested every year in order to reach a goal of $1,000,000 in 30 years at an interest rate of 5%? (assume no upfront investment PV=0)

Choose One • 20 points

- $15,051.44
- $231,377.45
- $1,000,000
- $33,333.33

### 3. The two bank websites I researched showed that their annual savings account interest rates are ______. This is because _____.

Choose One • 15 points

- high…they are risky investments
- low…they are nearly risk-free
- low…the government (specifically Congress) keeps them low
- high…the supply of ATM machines is too low

### 4. What one-time investment amount must be invested today, at a higher interest rate of 7.17% in order to reach a goal of $1,000,000 in 30 years?

Choose One • 20 points

- $1,000,000
- $71,700
- $152,257.13
- $125,257.31

### 5. The interest rates on savings accounts is ____ the interest rate (rate of return) on riskier investments such as stocks & stock funds.

Choose One • 3 points

- the same as (they are determined by central bank)
- lower than
- higher than

### 6. Savings account interest rates at the bank are products just like groceries are at the grocery store. Just as we make economic decisions with our food buys…

Choose One • 2 points

- we should always accept the savings rate at the nearest bank
- we should shop around for (or at least consider) the highest savings rate possible.

### 7. If you want to reach a long-term investment (savings) goal, a good strategy to consider is…

Choose One • 5 points

- saving money up-front and leaving it to grow over time.
- saving money out of your income and placing it into an investment each year.
- both of these
- playing the lottery (show me the money! even my stacks got stacks)

### 8. TRUE OR FALSE: If you want to become a millionaire in 30 years, a savings account is the best investment to choose.

Choose One • 2 points

### 9. TRUE OR FALSE: If you want to become a millionaire in 30 years, the time value of money formulas that businesses use will help you estimate how much money to invest.

Choose One • 3 points

### 10. If you want to become a millionaire in 30 years…

Choose One • 3 points

- the longer you wait to start investing, the bigger the payout is.
- the earlier you invest, the better your odds will be of reaching this goal.

### 11. If you want to become a millionaire in 30 years…

Choose One • 2 points

- stocks and/or mutual funds could get you there faster.
- a savings account is the best choice.

### 12. Which of the following dynamics of investing / creating wealth is TRUE?

Choose One • 5 points

- the higher the interest rate / return on your investment, the larger the amount of money you need to invest in order to reach your goal.
- the higher the interest rate / return on your investment, the smaller the amount of money you need to invest in order to reach your goal.