FIN EXAM 1 TEST Q'S
molly and justin are donating $5,000 to their fave, tax deductible charity. this contribution will bring their total itemized deductions to $20,000 assuming they are in the 28% marginal tax bracket how much will they save in taxes by donating the $5,000
$1,400
if $100 is invested at 8% compounded semiannually for 1 year, at the end of the year your balance will be
$108.16
Sandy wants to go on a trip in 10 years if she invests $1,000 per year for 10 years at a 12% interest rate, she will accumulate $_____
$17,549
harry just received $2,000 for graduation. he plans on investing the money for 5 years at 8% compounded annually. he will have an end balance of
$2,938
a lump sum deposit of $8,000 left in the bank for 12 years at 9% compounded annually will result in an ending balance of
$22,480
The monthly pymt on an 8% 36-month, add-on loan for $10,000 would be
$344
diana sold mutual find shares she had owned for 4 years so that she could use the the proceeds to travel across Europe shes in the 35% marginal tax bracket and her capital gains from this sale were $30,000 how much tax will she owe on those gains
$4,500
you have $450 in your checking account when your ATM and PIN are stolen. You could lose up to ______ if you report the lost ATM card within 8 business days
$450
elena purchased a stamp collection for $5,000 30yrs ago if it appreciated 8% annually what is it worth today
$50,313
if you purchase a $110,000 and make a 10% down pymt, how much would 1 point cost at closing?
$990
Theresa invested $5,000 she expects will earn 7% annually approx how many years will it take for the account to double in value
10
a money factor of 0.00280 on a lease is equivalent to an annual percentage rate of
6.72
A lender will usually require a loan-to-value ratio of ___________ or less for you to avoid having pay private mortgage insurance
80%
phil has $2,000 and needs it to grow to $4,000 in 8 years Assuming he adds no more money to the fund what rate of return would he need
9%
you are preparing your own tax return the least costly source for answering your questions would be
IRS 800 numbers
when the simple interest method is used to determine finance charges, the interest is calculated based on
actual balance of the loan
You wanna borrow $1,000 at an interest rate of 10%. the most expensive method of calculating the dollar cost of the interest on this installment loan will be
add-on method
you have no employer provided pension plan; your IRA contributions are treated as
an adjustment to gross income
historically the primary purpose of savings and loan associations was to
channel savings into mortgages
if you need a loan to buy furniture, the lowest interest rate would usually be available from a
credit union
the tax rate on capital gains for most people is
dependent on the time the asset was owned
t or f a credit card user's credit rating will be harmed if she pays only the minimum monthly pymt on a credit card
f
t or f banks and other financial institutions insure the contents of a safe deposit box
f
t or f one's marginal tax rate is typically lower than ones average tax rate
f
t or f the balance sheet equation is assets + liabilities= net worth
f
t or f you can stop payment when you purchase an item w your debit card
f
interest will almost always begin to accrue immediately when you use a bank credit card to
get cash advantages
if interest on a savings account is compounded semi-annually, the effective rate of interest will be.....
higher than the nominal rate
which of the following state and local taxes are deductible on federal income taxes for those that itemize deductions
income taxes and property taxes
a legal claim that allows creditors to liquidate loan collateral is a
lien
if the maximum loan-to-value ratio that a lender will accept on a $100,000 loan is 90%,then the borrower must
make a minimum down pymt of $10,000 plus closing costs
what are proper uses of credit
purchase of a house financial emergency investing shopping convenience
A _______ would be most likely to have to pay estimated taxes -union worker -school teacher -self employed plumber
self employed plumber
a capital gain is the result of
selling an asset for more than the purchase price
if you do not wish to itemize yo deductions you can use the
standard deductions
t or f a budget is a detailed financial forecast
t
t or f a certified check is a personal check that the bank guarentees that the funds are available
t
t or f a charge made on your credit card becomes a liability as soon as the charge is incurred
t
t or f a short term capital gain would be taxed at the same rate as your salary
t
t or f capitalized cost on an auto lease is the same as the amount of the price that is being financed
t
t or f compound interest means that a savings account earns on the interest previously earned
t
t or f credit card users can often avoid finance charges entirely by paying off their total balances by the stated due date
t
t or f debit and ATM card transactions are linked to your checking account
t
t or f if the discount method is used to calculate a finance charge of $250.60 on a $2,400 loan, the the amount to be repaid is $2,400
t
t or f if you are eligible to recieve a tax refund, you will have to file a tax return to get the refund
t
t or f if your bank states that it compounds monthly, the effective interest rate is will be greater than the nominal interest rate
t
t or f one who leases a car is typically responsible for early termination costs, even when early termination is due to theft or auto accidents
t
t or f the annual percentage yield formula considers compounding when determining an interest rate
t
t or f the income and expenditures statement provides a measure of financial performance over a period of time
t
t or f when comparing 2 installment loans w the same principal and APR the loan w the longer maturity will have the lower monthly pymts and the higher total costs
t
t or f you put $1,000 into a 12-month certificate of deposits after 7 months you really need the money the bank will let you have it but you will have to pay a penalty
t
t or f your savings will grow faster w monthly interest compounding than w quarterly interest compounding
t
with an open account credit, one can often avoid interest charges if
the account balance is paid in full every month
sometimes is may be better to use savings rather than borrow to make a purchase this would be recommended when
the cost of borrowing is greater than the interest earned on the savings
connie is a 20 yr old college student who earned $8,000 and spent it all on her support during the year her parents may claim her as a tax dependent as long as
they contribute more than half her support for the year
commercial banks generally charge lower interest rates than other leading institutions because
they usually take only the best credit risks
ben and jack both made $60,000 this year. ben 30 yrs old is married w 2 children jack 68 urs old & no dependents who will pay less social security taxes?
they will pay the same social security taxes
balance sheet eqn
total assets- total liabilities=net worth
