Fiveable
💼AP Business with Personal Finance
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💼AP Business with Personal Finance

FRQ 2 – Personal Finance
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Unit 3: Personal Saving and Borrowing / Business Finance and Accounting
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Each FRQ type tests specific skills taught in particular units. Here's why certain units appear for each question type:

This mapping reflects College Board's exam structure - each FRQ type tests specific skills that are taught in particular units.

Practice FRQ 1 of 161/16

2. Priya has come to you, a financial advisor, for guidance regarding her financial situation. Figure 1 shows a summary of Priya's assets and liabilities.

Priya is a 45-year-old software engineer earning an annual salary of $115,000. Over the years, she has steadily contributed to her retirement and purchased a home. However, after a recent series of unexpected home repairs and medical bills, she depleted her liquid savings and had to rely on credit cards to cover the costs.

Currently, after paying her mortgage, car loan, minimum credit card payments, and other living expenses, Priya has a monthly budget surplus of $1,200. Her primary financial goals are to pay off her high-interest credit card debt, which carries a 22% annual percentage rate (APR), and to build a liquid emergency fund of $15,000 in a high-yield savings account earning 4% APY so she does not have to rely on credit cards for future unexpected expenses.

Priya's assets include her home valued at $450,000, a retirement account balance of $210,000, and a checking account balance of $3,500, for total assets of $663,500. Her liabilities consist of a mortgage balance of $320,000, credit card debt of $18,000, and a car loan balance of $15,500, for total liabilities of $353,500.

Figure 1. Priya's Assets and Liabilities

Table 1
A.

Using data from Figure 1, identify a difference between Priya's total assets and her total liabilities.

B.

Describe a financial challenge or opportunity indicated in the scenario that is currently impacting Priya's ability to achieve her financial goals.

C.

Explain how a specific action taken by Priya could help her achieve one of her financial goals.

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Free Response Question Practice

This practice environment simulates the AP AP Business with Personal Finance Free Response Questions section. Here are some guidelines:

  • Read each question carefullybefore responding. Pay attention to command verbs like "identify," "explain," "analyze," or "evaluate."
  • Use the timer to practice time management. You can pause, restart, or hide the timer as needed.
  • Mark for Review if you want to come back to a question later.
  • Your responses are saved automatically as you type. You can also use the drawing tool for questions that require diagrams or graphs.
  • Use the toolbar for formatting options like bold, italic, subscript, and superscript.
  • Navigate between questions using the Previous and Next buttons at the bottom of the screen.

Tip: Answer all parts of each question. Partial credit is often available, so even if you are unsure, provide what you know.