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CRPC Practice Exam 2 | Questions And Answers Latest {} A+ Graded | 100% Verified
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CRPC Practice Exam 2 | Questions And Answers Latest {} A+ Graded | 100% Verified
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CRPC Practice Exam 2 | Questions And Answers Latest {2024- 2025} A+ Graded | 100%Verified
Richard wants to have an annual retirement income of $100,000 (payable at the beginning of each year)
protected against 3% inflation.
Assuming a 7% after-tax rate of return and a retirement period of 30 years, how much money does
Richard need in order to meet his goal?
Explain how you need to input this on the calculator and why. - Step One - Set the calculator to BEGIN.
Step Two - Calculate the inflation adjusted rate of return (One plus the Rate of Return divided by One
plus the interest rate, minus one, multiplied by 100 = the inflation adjusted rate of return) Put this
number in the I/YR
Step Three - 100,000 goes in as a PMT
Step Four - 30 goes in as N
Step Five -Press PV
Richard needs $1,822,042.88 in today's dollars to meet his needs.
How do you calculate the inflation-adjusted rate of return? - 1 plus the Rate of Return
Divided by
1 plus the interest rate
minus one
, multiplied by 100
Tom has been promised a stream of $40,000 annual payments at the end of each year for 25 years. The
present value of these payments discounted at a rate of 5% is which one of the following amounts? -
Step One - The problem says END in it so you have to set your calculator to the END mode.
Step two - Enter the $40000 as a PMT
Step Three - Enter 25 as the N.
Step Four - Enter 5 as the I/R
Step Six - Hit PV.
$563,758
Nick wants to maintain the purchasing power of $75,000 (in today's dollars) in retirement. If inflation
continues to average 3.5%, approximately what amount will Nick need in 20 years to equal the
purchasing power of $75,000 today? (Round your answer.) - If you know the Rule of 72, and you divide
3.5 into 72, you arrive at the number 20, which is the number of years it will take for a sum to double.
With a calculator, you can solve for the future value of $75,000 over 20 years at 3.5%.
Keystrokes: 20 N, 3.5 I/YR, 75,000 PV, FV = $149,234; rounded = $150,000
What is the second step in the retirement planning process? - The second step in the retirement
planning process is to gather client data, including goals and expectations
What is the first step in the retirement planning process? - The first step is to establish and define the
client-counselor relationship which includes disclosing the counselor's compensation arrangement
What is a characteristic of a TIP? - The increase in principal is taxable each year. Any annual increase in
principal is subject to federal taxation (unless in a tax-deferred account). Returns are tied to the
consumer price index. TIPS are sold at par value and have maturities up to 30 years.
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