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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) jf3.

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)

A situation in which someone would use their financial reserve is if they were to lose their job and were poor or homeless. They would use the money to help provide for themselves until they can get a job. Or if you are on a tight income and need money for the hospital.

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)

I think about two months’ worth should be in financial reserve. Just in case you don’t have an income for a while or if someone needs money. Two would be my best guess or you could go with three to be safe.

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)

In would go with compound interest. In compound interest the interest builds over time in the account. So you will end up making interest on interest.

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 quarterly interest because it happens more often the interest turns to principle faster so it earns interest and the principle increases.

5. Which strategy for saving do you think would work best for you? Why? (3-6 sentences. 2.0 points)

A strategy that I would prefer would be paying myself because I wouldn’t forget to give myself money. I would be my own boss and I wouldn’t have to pay workers. Just kidding I would, but that would be cool.

6. Describe two financial goals that you would want to meet before you begin investing. Explain why you would want to reach those goals first. (2-4 sentences. 2.0 points)

I would want money aside for my housing and educational needs. Also I want a financial reserve to keep money for an emergency just in case something happens. I would need these things before I invest to be safe and not be sorry.

7. Describe at least two factors of an investment that you would want to consider before putting money into that specific investment. (2-4 sentences. 2.0 points)

Before investing you’ve got to know everything about it. You want to know who runs the business to see if he’s trustworthy and reliable. You have to know what they want and what they plan to do.

8. Calculate the return on investment in dollars and as a percentage for an investment that you purchase for