Test 1

If Melinda Miller estimates that her $100 weekly grocery bill will increase at an annual inflation rate of 4%, what should her weekly grocery bill be in 3 years?

$100 * 1.125 = $112.50

Steven Sterling had earnings from his salary of $34,000, interest on savings of $800, a contribution to an individual retirement account of $1,500, and dividends from mutual funds of $1,600. Steven's adjusted income (AGI) would be:

Salary $34,000 + $800 Interest + $1600 Dividends - $1,500 IRA Contribution = $34,900

The Fed refers to

The Federal Reserve System

liquid assets

items of value that are easily converted to cash

Which of the following would be deducted from gross income to obtain adjusted gross income

Individual retirement account

With an inflation rate of 5.1 percent, prices would double in about ___________ years.

14

With an inflation rate of 14 percent, prices would double in about ___________ years.

5

If inflation is expected to be 8 percent, how long will it take for prices to double?

9

Fred Flintstone is single and earns $50,000 in taxable income and will use the following tax rate schedule to calculate the taxes he owes. 0 - 7,150 10% 7,150 - 29,050 15% 29,050 - 70,350 25% 70,350 - 146,750 28%

10% Bracket: $7,150 x 10% = $71515% Bracket: ($29,050-$7,150) = $21,900 x 15% = $3,28525% Bracket: ($50,000 -$29,050) = $20,950 x 25% = $5,237.50 Total: $715 + $3,285 + $5,237.50 = $9,237.5

Beginning with 2018, which tax form are all tax payers now required to file?

1040

At the end of the year, Walter received a form that showed his payments from independent contracting. That form is called a

1099

Which of the following presents a summary of income and outflows for a period of time?

A cash flow statement

A personal balance sheet presents

Items owned and amounts owed

a current ratio of 2 means

$2 in liquid assets are available for every $1 of current liabilities

Money Management refers to

Day to day financial activities

The money left over after paying for housing, food, and other necessities is called

Discretionary income

You can buy a piece of land today that you expect will be worth $500,000 in 9 years. Assuming you could invest your money at 13%, what is the most you would be willing to pay for the property?

Present Value of a lump sum (Exhibit 1-C) $500,000 * .333 = $166,500

You expect to receive $40,000 per year on a contract that will last 5 years. You are trying to compare this offer to a lump sum payment. If you can earn 8% on your investments, how much is the contract worth to you today?

Present Value of an Annuity (Exhibit 1-D) $40,000 * 3.993 = $159,720

An expense that would be included in the itemized deductions of a taxpayer is

Real Estate property tax

Which of the following is a deduction to determine take-home pay?

Social Security taxes