Finance
If 10,000 investment earns 4% annual return, what should it's value be after one year?
$10,400
If you deposit $500 into a Certificate deposit earning 3%, what would be your earnings after 12 months?
$15
Randy Hill wants to retire in 20 years with 1,000,000. if he can earn 10% per year on his investments, how much does he need to deposit each year to reach his goal?
$17, 460 use N, I/y etc to solve for PMT
If Vince charged $200 on his credit card with 18% APR and he paid his balance in full within the grace period how much was he required to pay?
$200
Peter borrowed $225. He paid $20 interest and a service charge of $3.00. What is his finance charge?
$23.00
Using the following information, what is the cost to buy a car? •Down payment $3,000 •Monthly loan payment $350 per month for a six-year loan •Opportunity cost of down payment$3,000 × loan period (in years) × 2% interest •Estimated value of vehicle at end of ownership period $4,000
$24,560- calculate costs of buying
If Jack was in a 25% tax bracket and received a $1,000 tax deduction, by how much would his taxes be reduced?
$250 use this formula ...
Evan had three accounts as listed below. In 2017, how much was his total insurance coverage by the FDIC? Bank A: $150,000 Bank B: $50,000 Bank C: $350,000
$450,000
What is the unit price of a 32 ounce box of brown sugar that costs $3.20?
.10 per ounce
At the end of the year, Walter received a form that showed his payments from independent contracting. That form is called a
1099
Victor read the fine print for a checking account he was thinking about using. The fine print said, "A minimum balance of $500 is required. If your balance falls below this level, you will be assessed a monthly fee of $10." Since Victor was planning to keep only a $50 balance in his account, how much could he be charged each year?
120.00
Timothy Carter went out to eat with his girlfriend at a fancy restaurant. When he tried to pay the bill with his MasterCard credit card, he was told that the restaurant accepted only cash or American Express. His waiter suggested that he use the ATM across the street to withdraw cash using his credit card. Tim did as suggested and didn't pay attention to any fees until he received his credit card statement one month later. He was shocked to see the total fees (3% cash advance), and his APR was increased to 21%. Given the cost of the meal ($125) plus the associated fees, how much did his meal cost him?
130. 94
Using the following information, what is the cost to lease a car? •Security deposit $300• Monthly lease payment $300 per month for a five-year lease• Opportunity cost of security deposit 300 × loan period (in years) × 2% interest •End-of-lease charges 500 Answers: $18,000 $18,530 $18,560 $18,830 $19,030
18,530 - Vehicle operating costs
What is the APY for a savings account with a $250 balance that receives $9 interest for the year? Selected Answer: 3.6%
3.6%
Fico scores generally range from
350 to 850
Becka borrowed $100 from her cousin at the rate of 6% per year. If the inflation rate was 2% that year, what is her cousin's actual rate of return on the loan?
4%- calculate interest
Nicholas earned 8% in his savings account. If he is in the 28% tax bracket, what is his after-tax savings rate of return?
5.76%
Which of the following financial docs would most likely be stored in a safe deposit or fireproof home safe?
Marriage certificates
Athena wants to determine if she should itemize her deductions. She has identified several possible deductions. Which of the following is NOT a proper itemized deduction?
Miscellaneous expenses less than 2% of AGI
Properly maintaining and operating the product is part of the ____ phase of the research-based buying process.
Post purchase activities
Which of the following is a valid reason for using credit?
Purchasing a car so a homemaker can return to work Borrowing for a college education Purchasing an item that costs less now than it will later Paying for a medical emergency
The consumer price index measures
The average change in prices of a fixed basket of goods and services of urban consumers
To calculate the time value of money, we need to consider all of the following except the
type of investment
A family with $100,000 in assets and $60,000 of liabilities would have a net worth of Selected Answer: $40,000. Answers: $20,000. $40,000. $60,000. $100,000. $160,000.
use net worth equation
All of the following are fixed expenses except an
utilities
You may be required to make estimated tax payments if
you are an independent contractor
Ahome file should be used to keep
financial records for current needs
Investments, insurance, and tax assistance are tools for financial planning and are also known as
financial services
Home equity loans
have interest that is tax-deductible
An investor should expect to receive a risk premium for
higher uncertainty about getting his/her money back
Karen bought a mixer. She received a warranty that covers only certain aspects of the product. If the product fails, she may be required to pay part of the costs for shipping or repairs. Which of the following warranties does she have?
limited warranty
Given the following information, calculate the liquidity ratio: Liabilities = $25,000Liquid assets = $5,000Monthly credit payments = $800Monthly savings = $760Net worth = $75,000Current liabilities = $2,600Take-home pay = $2,300Gross income = $3,500Monthly expenses = $2,050 Selected Answer: 2.44 Answers: 0.16 0.41 2.44 2.50 6.25
liquid ratio equation
The difficulty of converting savings and investments to cash is referred to as ___ risk
liquidity
Which of the following refers to the opportunity to withdraw your money on short notice without incurring a loss in value
liquidity
The tax that is a major source of revenue for local governments is called an
real estate property tax
A line of credit is
the maximum dollar amount of credit the lender has made available to a borrower.
Fredrick received a $1,400 loan from the bank for a new appliance. The bank is using the simple interest formula for this two-year, 8% loan. What is his total interest?
total interest formula- $224
The major function of personal financial planning is to
Achieve personal economic satisfaction
The amount printed on a label with the suggested retail price that is posted on a vehicle is called the
Sticker price
Will wants to open an account with $500 that will allow him easy access to his funds (by checks, ATMs, or debit card usage) from many locations. He also wants to earn at least a low interest rate and have federal deposit insurance. What kind of account should he open?
An interest-earning checking account
When you select a financial services provider, you should ask all of the following questions except
Answ: all of these questions should be asked Will I be able to borrow money if I need it? How can I minimize the cost of checking and payment services? Where can I get the best return on my savings?
The truth in Savings Act requires financial institutions to disclose the ___ on savings accounts
APY
Using the following table, calculate the taxes for an individual with taxable income of $45,000. 10%Up to $8,50015%$8,500-$34,50025%$34,500-$83,60028%$83,600-$174,40033%$174,400-$379,15035%Over $379,150 Selected Answer: $7,375 .
7,375 use income tax computation - taxable income and amt owed for federal income tax
If inflation is expected to be 8 percent, how long will it take for prices to double?
9 years
all of the following are non-deposit institutions except
A credit union
which of the following is an example of open-end credit?
A department store credit card
The saving component of financial planning focuses on long-term security and includes:
A regular savings plan for emergencies
Which of the following is not a valid credit application question
Answ: they are all valid questions How much of a loan are you requesting? What is the account number for your checking account? What is the name of the nearest relative not living with you? How many dependents do you have?
Installment credit, in which the debt is repaid in equal installments over a specified period of time, exploded on the American scene with the advent of the
Automobile
The price of a leased vehicle is known as
Capitalized cost
Which of the following are associated with a vehicle lease
Capitalized cost. Money factor. Payment schedule. Residual value.
Craig wants to get his old car repaired, but he doesn't want to spend much money. He probably will NOT want to go to the most expensive repair service, which is from a(n)
Car dealer
Consumer credit
Dates back to colonial times
which of the following will increase the net worth of a household
Decrease spending by 5$ per day
Individuals can file their federal taxes using all of the following except
Deliver in person
A tax imposed on the value of a person's property at the time of death is called a(n)
Estate tax
Most products come with some guarantee of quality. Which of the following is usually in written for, created by the seller or manufacturer, and has two forms?
Express warranty
Mike bought a new car. His new car warranty probably included all of the following except
Extended coverage for air conditioning
If you think your identity has been stolen, which of the following actions does the Federal Trade Commission recommend you take immediately?
File a police report
A variable operating cost for a vehicle is
Maintenance and repairs
Which of the following is an example of a financial opportunity cost
Forgoing wages to attend school
An example of a fixed expense is
Home rental payment
If you miss payments on a home equity loan, you can lose your
House
Marcus bought a certificate of deposit whose interest rate is based on the stock market. Sometimes, his earnings are higher than other similar cds, and at other times, his earnings are lower. He purchased a
Indexed CD
The inability to pay debts when they are due because liabilities far exceed the value of assets is called
Insolvency
Which of the following usually offers money mutual market funds?
Investment company
The dealer's cost is also known as the
Invoice price
While evaluating alternatives, all of the following are appropriate questions you could ask before making a major purchase except
Is it possible to delay the purchase or to do without the item? Should I pay for the item with cash or buy it on credit? Which brands should I consider? How do the price, quality, and service compare at different stores?
Shannon is working on her federal income tax form and wants to determine if she should itemize her deductions. She has identified several possible deductions. Which of the following is an acceptable deduction?
Miscellaneous expenses that exceed 2% AGI
Which of the following is an advantage of a car lease
Monthly lease payments are usually lower than monthly financing payments.
The lowest payment does not necessarily mean the best credit plan. If your car loan is a long period of time, you may end up owing more than the car is worth, which is called
Negative equity
Which of the following in Not a valid reason for borrowing?
Paying for everyday living expenses
What type of public service could lead to loan forgiveness?
Peace Corps Military service Teachers serving low income areas Medical students working in low-income or remote areas Answers: Peace Corps Military service Teachers serving low income areas Medical students working in low-income or remote areas
Which of the following do NOT have to be repaid?
Pell Grants and Scholarships
Bob was married to Sandy, and they have a 12-year-old son. Sandy passed away last year. Bob needs to complete his federal income taxes for the year. What filing status could he use for 2 years after the death of his spouse?
Qualifying widow or widower
Credit files can include all of the following except
Race or nationality
The Equal Credit Opportunity Act (ECOA) prohibits a lender from discriminating based on
Race. Nationality. Age. Sex.
Which of the following is most correct?
Rare coins and stamps belong in a safe deposit box
What circumstances would allow a student loan to be deferred?
Re-enrollment in school Demonstrated financial hardship Unemployment Military deployment
A vehicle lease has several costs. Which of the following is the expected value at the end of the lease?
Residual value
Which of the following goals would be the easiest to implement and measure?
Save $100 a month to create a $2,400 emergency fund in 2 years.
Which of the following is a liquid asset
Savings/money market assets , Cash surrender value of life insurance , checking account balance, money market accounts
Negotiation activities are part of the ____ phase of the research-based buying process.
Selection and purchase
The number of personal financial records a household has to organize may seem overwhelming. How long should you keep copies of your tax returns?
Seven years
If you have a problem whose remedy will be between $1,500 and $3,000, the appropriate tool to use would be (a)
Small claims court
Margaret signed the back of her check with the words "pay to the order of Penelope." She used a(n)
Special endorsement
Which of the following is not a main purpose of a budget?
Spend your money without financial worry
For which type of loan does interest accrue WHILE the student is still in school?
Stafford loans
which Federal loans are the most frequently disbursed?
Stafford loans
Sam is comparing the costs of two loans. The principal amount of each loan is $5,000. One is due in one year and the other is due in four years. Both have the same stated rate of annual interest. Which of the following is true?
The interest charges for the one-year loan will be lower than the interest charges for the four-year loan.
Why are some financial service operations referred to as financial supermarkets?
They offer a combination of services from one source .
Which of the following is not correct ?
Using credit can increase the amount of money that will be available to spend in the future.
Gross income less Adjustments to Income equals
adjusted gross income
The use of property or savings to secure a loan relates to
collateral
Future value computations are often referred to as
compounding
Present value computations are also referred to as
discounting
Following the signing of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, debtors seeking to erase all debts will have to wait ___ year(s) from their last bankruptcy before they can file again.
eight
a tax due on the purchase of gasoline is called an
excise tax
