Personal Finance Final Exam Review

Charlie worked 38 hours last week. Her hourly rate is $8.25. How much did she earn in overtime pay?

$0

What is the net pay after the deductions for Cards 26 - 28?

$1,060.25

How much does Constance earn in a week with benefits?

$10.00 (per hour) * 1.18 (wage + benefits) = $11.80 (Per hour with benefits) $11.80 (per hour) * 35 (hours) = $413.00 (Per work week with benefits)

Constance earns $10.00 per hour. Her benefits package is equal to 18 percent of her hourly wages. Constance works a 35-hour work week. How much does Constance earn in a week without benefits?

$10.00 (per hour) * 35 (hours) = $350.00 (Per week without benefits)

Gross Pay: $576.00 What are the total required deductions for Cards 21 - 23?

$101.66

Gross Pay: $1287.50 Calculate Federal Income Tax (10% of Gross Pay)

$128.75

Tang worked 52 hours last week. His hourly rate is $7.80. How much did he earn in overtime pay?

$140.40

Gross Pay: $1287.50 Calculate Medicare Tax (1.45% of Gross Pay)

$18.67

The amount of income you planned for June was $1,500. The amount you actually received was $1,300, resulting in a

$200 unfavorable variance

Gross Pay: $1287.50 What are the total required deductions for Cards 26 - 28?

$227.25

Tang worked 52 hours last week. His hourly rate is $7.80. What was his salary, not including overtime pay?

$312.00

Charlie worked 38 hours last week. Her hourly rate is $8.25. What was her salary, not including overtime pay?

$313.50

Charlie worked 38 hours last week. Her hourly rate is $8.25. What was his gross pay? (regular pay plus overtime pay)

$313.50

Maureen worked 48 hours last week. Her hourly rate is $8.00. What was her salary, not including overtime pay?

$320.00

Gross Pay: $576.00 Calculate Social Security Tax (6.2% of Gross Pay)

$35.71

Maureen worked 48 hours last week. Her hourly rate is $8.00. What was her gross pay? (regular pay plus overtime pay)

$416.00

The amount you budgeted to spend on food for June was $500. The amount you actually spent was $455, resulting in a

$45 favorable variance

Tang worked 52 hours last week. His hourly rate is $7.80. What was his gross pay? (regular pay plus overtime pay)

$452.40

Gross Pay: $576.00 What is the net pay after the deductions for Cards 21 - 23?

$474.34

Gross Pay: $576.00 Calculate Federal Income Tax (10% of Gross Pay)

$57.60

Sam's rate of pay is $7.65 per hour. He worked 32 hours last week. Compute his weekly pay.

$7.65 (pay per hour) X 32 (hours worked last week) = $244.80 (weekly pay)

Claire earns $750 per month. Her monthly job hours are 80. Compute her hourly pay.

$750 (pay per month) / 80 (numbers of hours worked) = $9.375 rounded to $9.38 (pay per hour)

Gross Pay: $1287.50 Calculate Social Security Tax (6.2% of Gross Pay)

$79.83

Gross Pay: $576.00 Calculate Medicare Tax (1.45% of Gross Pay)

$8.35

Jim makes $800 per month. Compute his yearly salary.

$800 (pay per month) X 12 (number of months in a year) = $9600 (yearly salary)

Maureen worked 48 hours last week. Her hourly rate is $8.00. How much did she earn in overtime pay?

$96.00

What are the four primary responsibilities of the Federal Reserve System?

- Conducting the nation's monetary policy by influencing money and credit conditions in the economy in pursuit of full employment and stable prices. - Supervising and regulating banks and other important financial institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers. - Maintaining the stability of the financial system and containing systemic risk that may arise in financial markets. - Providing certain financial services to the U.S. government, U.S. financial institutions, and foreign official institutions, and playing a major role in operating and overseeing the nation's payments systems.

Bear Market

- May be a good time to purchase stocks because prices are lower - Prices are steadily decreasing - The economy is in a general slowdown

Bull Market

- Profit-taking may cause a temporary drop in some stock prices - It is a period of time when most people are working, wages are rising and most people are optimistic - Prices are steadily increasing

What functions do the Reserve Banks serve?

- conducts the nation's monetary policy to promote maximum employment, stable prices, and moderate long-term interest rates in the U.S. economy - promotes the stability of the financial system and seeks to minimize and contain systemic risks through active monitoring and engagement in the U.S. and abroad - promotes the safety and soundness of individual financial institutions and monitors their impact on the financial system as a whole - fosters payment and settlement system safety and efficiency through services to the banking industry and the U.S. government that facilitate U.S.-dollar transactions and payments - promotes consumer protection and community development through consumer-focused supervision and examination, research and analysis of emerging consumer issues and trends, community economic development activities, and the administration of consumer laws and regulations.

When was the internet bubble?

1995 - 2001

When was the housing market crash?

2008

A person budgets $40 for entertainment but spends $50. What is the percent of variance?

25% unfavorable variance

How many varieties of spaghetti sauce did Howard make and take with him around the US?

45 variaties

Generally, you may deduct up to _____ percent of your adjusted gross income to charitable donations.

50%

Where does your tax money go?

61% - Mandatory Spending (2.5 Trillion) 31% - Discretionary Spending (1.3 Trillion) 8% - Interest on National Debt (325 Billion)

A checking account

A demand deposit account and may have a charge for each check written

Check

A legal document used to transfer money

Bank Reconciliation

A process that explains the difference on a specified date between the bank balance shown in your personal bank statement, as supplied by the bank, and the corresponding amount shown on your personal check register.

Endorsement

A signature or instructions written on the back of a check

Deposit Slip

A small written form that is sometimes used to deposit funds into a bank account

When you create a personal budget, the final step in the process is to

Balance the budget

A spending and saving plan based on expected income and expenses

Budget

Non-recession Proof Jobs (5)

Construction and Supporting Industries Home Furnishing Retail Auto dealerships and other motor vehicle sales Vacation travel Printing and Related Services

Saving money is about ______ and ______.

Emotion and Contentment

Items for which you must spend money are called

Expenses

Which of the three types of sauces mattered the most? Why?

Extra Chunky It was not available at the time. No one was making it or selling it

As general price levels rise, the value of money

Falls

Expenses that do not change every month, such as rent

Fixed Expenses

Rent, car insurance premiums, cable bill are examples of

Fixed expenses

Basic Needs

Food Clothing Shelter Medical Care

A simple federal tax return form designed for uses by single and joint filers with no dependents is...

Form 1040EZ

All of the following are examples of mandatory payroll deductions EXCEPT...?

Health Insurance Premiums

Who does Malcolm Gladwell talk about in the video?

Howard Moskowitz

Gross Pay

Includes regular hours times regular pay, plus overtime hours times overtime pay.

If you buy a car with cash instead of a loan, you avoid paying

Interest

What is the formula for simple interest?

Interest (I) = Principal(P) x Rate(R) x Time(T)

Generally speaking, the more exemptions claimed on the W4, the _______ federal income taxes withheld from one's paycheck.

Less

Typically, a car with a 4 cylinder engine will cost ____ than the same make and model car with a 6 cylinder engine.

Less

Recession Proof Jobs (6)

Medical Professional Specialized care, therapy, and counseling Law enforcement Public Utility Services Financial Services Educational Services

Other needs

More than one of something of a necessity. (Ex. More than one pair of shoes)

What are the three tools the Federal Reserve uses in regard to monetary policy?

Open market operations The discount rate Reserve requirements

How does Open Market Operations work?

Open market operations involve the buying and selling of government securities. The term "open market" means that the Fed doesn't decide on its own which securities dealers it will do business with on a particular day. Rather, the choice emerges from an "open market" in which the various securities dealers that the Fed does business with - the primary dealers - compete on the basis of price. Open market operations are flexible, and thus, the most frequently used tool of monetary policy.

Health insurance premiums, dental insurance premiums, and 401K contributions are all examples of _____.

Optional payroll deductions

Overtime

Paid when a person works more than 40 hours a week, but only if they are an hourly employee. Salaried employees do not receive overtime. Rate 1.5 times regular rate of pay

What was the first corporation that asked for Howard's help?

Pepsi

What was the brand that Howard worked on that caused him to have his big breakthrough? - And what was that breakthrough?

Pepsi and Vlassic Pickle Don't just improve your original - create new flavors. "Look for the perfect Pepsis, not the perfect Pepsi"

An e-mail scam designed to get individuals to give out personal information such as bank account numbers

Phishing

What three types of sauces do the typical Americans prefer?

Plain Spicy Extra Chunky

When you create a personal budget, the second step in the process is to

Plan the amount you will save

Systematic investing is a _________ approach to making an investment. You start with low risk liquid investments and then go to more risky investments so the principal will grow over time.

Planned

Employee Benefits

Profit sharing Paid vacation and holidays Employee Services Childcare Sick pay Leaves of Absence Insurance Disability insurance Bonuses and Stock options Pensions and saving plans Travel expenses

What was Howard Moskowitz's profession?

Psychophysicist

Monetary Policy

Refers to what the Federal Reserve, the nation's central bank, does to influence the amount of money and credit in the U.S. economy. What happens to money and credit affects interest rates (the cost of credit) and the performance of the U.S. economy.

Which type of inflation occurs when prices are high, then drop due to lower demand, and then are restored to a previous high level?

Reflation

Three bank services offered to customers from the textbook reading.

Safety Deposit Boxes Cashier's Checks Over Draft Protection

Baby step #1?

Save $1,000 in an emergency fund

A charitable donation can be made to an organization under the IRS code of

Section 170(c)

Which items in the budget are fixed expenses?

Student loan payment Rent Cable/Internet Renters insurance

Who are the member banks?

The 12 Federal Reserve Banks and their 24 Branches are the operating arms of the Federal Reserve System. Each Reserve Bank operates within its own particular geographic area, or district, of the United States.

Describe when and how the Federal Reserve was created?

The Federal Reserve System, often referred to as the Federal Reserve or simply "the Fed," is the central bank of the United States. It was created by the Congress to provide the nation with a safer, more flexible, and more stable monetary and financial system. The Federal Reserve was created on December 23, 1913, when President Woodrow Wilson signed the Federal Reserve into law.

What are the different financial services that the Federal Reserve Banks provide?

The Federal Reserve is a "bank for banks" and provides financial services to depository institutions such as banks, credit unions, and savings and loans. The services provided are much like those that depository institutions provide to their customers. These services include collecting checks, electronically transferring funds and distributing and receiving cash and coin.

What are the goals of monetary policy?

The goals of the Monetary Policy are to promote maximum employment, stable prices, and moderate long-term interest rates. They support conditions for long-term economic growth and maximum employment.

Federal funds rate

The interest rate at which depository institutions lend reserve balances to other institutions overnight.

Discount rate

The interest rate that is charged by Federal Reserve Banks to depository institutions on short-term loans.

Reserve requirement

The portions of deposits that banks must maintain either in their vaults or on deposit at a Federal Reserve Bank

Wants

Things that people desire for reasons beyond survival and basic comfort

How is this an example of creativity by an entrepreneur?

Thinking outside the box and putting in the time to query the American people led to a great discovery that helped bolster business sales for Prego.

Money and benefits people receive from local, state, or federal governments are called

Transfer Payments

Buy-here, Pay-here car dealerships have multiple hidden fees and less than 48 hour return policies

True

In order to help determine if a used vehicle is reliable, you should get a car inspection before purchasing

True

One role of the Federal Reserve is to supervise and regulate banks and other financials institutions to ensure the safety and soundness of the nation's banking and to protect the credit rights of consumers.

True

The I9 Form is completed so an employer can verify that the worker is eligible for employment.

True

The difference between planned income or spending and actual income or spending is called variances

True

Expenses that can go up or down each month

Variable Expenses

Differences between planned income or spending and actual income or spending are called

Variances

This form is completed when one is hired to determine how much Federal Income tax should be withheld from one's paycheck.

W4

Check Register

Your personal record of your checking account, separate from the records your bank keeps.

Programs that reimburse employees for education costs...

can benefit the company because the worker has better skills

Social Security Tax

provides a system of old-age, survivors, and disability insurance