Posts by Dan Madden, CFP®
Calculating Rate of Return
Course: Investment PlanningLesson 1: Key Principles of Investing Student Question: Can you help solve a practice question? I looked through the textbook and my notes, and just couldn’t wrap my brain about how to solve the problem below. The confusing part to me is that the fund was not sold, so there is no sales price,…
Read MoreBi-weekly Refinance Payment Calculation
Mark refinanced his home mortgage to a 30-year fixed mortgage with biweekly payments. How much is each payment if he owed $410,000 at the time of the refinance and the interest rate is 7%? $1,021 $1,258 $1,521 $1,601 CLICK TO REVEAL ANSWER Expand B is the answer. Mark pays his mortgage every two weeks which…
Read MoreActuarial Assumptions in Defined-Benefit Pension Plans
Which of the following statements concerning the various actuarial assumptions used in estimating an employer’s contributions to a defined-benefit pension plan is correct? The higher the assumed rate of investment income, the larger the employer’s assumed contribution rate. The higher the employee turnover or termination rate, the larger should be the employer’s assumed contribution rate.…
Read MoreMedicare Part A Expenses
Which of the following individuals currently covered by Medicare Part A will not have any of their expenses covered by Medicare Part A? Evan who spent one week in hospice care before losing his battle with cancer. Felicia who was treated by her doctor for Strep throat. Greg who was needed a walker following hip…
Read MoreSkip Persons and the Generation Skipping Transfer Tax
Course: Estate PlanningLesson 7: Transfer Taxation IV – Generation Skipping Transfers Student Question: Regarding example below, would the death of the father, Stephen, not move Andrew one step up making him only one generation below Mrs. Jones? Would this not remove the generation skipping transfer tax? EXAMPLE: Upon her death, Mrs. Jones left her estate…
Read MoreLike-Kind Exchange
William found someone to buy his rental property in Maine. Which of the following properties that William would like to purchase as rental property would allow him to complete a like-kind exchange? A golf course rental property in Arizona that William identified 30 days after selling his Maine property. A beach rental house at the…
Read MoreCFP Professionals Highly Satisfied With their Career
CFP® Board Updates A 2023 Survey of CFP® Professionals shows overwhelming satisfaction with their career choice. Furthermore, they fully believe the certification has a positive impact on their career. 87% of CFP® Professionals are satisfied with their career 89% are satisfied with their decision to pursue CFP® Certification An overwhelming 86% would recommend others pursue…
Read MoreTax Saving Strategies
Dan and Karen Burles have 2 children, Coy (age 12, student) and Roger (age 21, student). Dan and Karen own a security equipment sales and installation business, an LLC. Dan and Karen are in the highest income tax bracket. They have a portfolio with $130,000 of municipal bonds (annual income $5,200), $80,000 of corporate bonds…
Read MoreInternal Rate of Return Calculation
Course: Fundamentals of Financial PlanningLesson 5b: Using the HP 10bII Calculator Student Question: In Example 2, the solution given has 6 years (including CF0) instead of 5. I believe the first year of Carl’s coin purchase should be CF0, but the fifth year – which includes a purchase and a sale – should be CF4.…
Read MoreRefinance Payment Calculation
Jim refinanced his home mortgage to a 30-year fixed mortgage with biweekly payments. How much is each payment if he owed $450,000 at the time of the refinance and the interest rate is 6%? $923 $1,244 $1,412 $2,592 CLICK TO REVEAL ANSWER Expand B is the answer. Brandon pays his mortgage every two weeks which…
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