Southern New Hampshire University
FIN250 - Personal Financial Planning
EXAM 1 questions and answers
1
Preethi plans to buy a house in the next 5 years. At present, she has total savings of $60,000. The median
house price in her state is nearly $100,000.
Which of the following investment options will Preethi most likely benefit from?
Investing $60,000 for 3 years at an interest rate of 10%
Investing $60,000 for 5 years at an interest rate of 10%
Investing $60,000 for 2 years at an interest rate of 13%
Investing $60,000 for 4 years at an interest rate of 12%
RATIONALE
Preethi should invest $60,000 at 10% interest for a period of 5 years. To calculate the most beneficial investment
from these options, we will use the formula to calculate the future value of the invested money at different interest
rates and different periods.
