Financial Math A

For the last 10 years, Megan has made regular semiannual payments of $1,624.13 into an account paying 1.5% interest, compounded semiannually. If, at the end of the 10 year period, Megan stops making deposits, transfers the balance to an account paying 2.3% interest compounded monthly, and withdraws a monthly salary for 5 years from the new account, determine the amount that she will receive per month. Round to the nearest cent. a. $616.39 b. $615.21 c. $39,079.25 d. $39,154.16

A

If the purchase price for a house is $218,500, what is the monthly payment if you put 3.5% down for a 30 year loan with a fixed rate of 6.5%? a. $1,332.73 b. $1,378.19 c. $1,247.54 d. $646.40

A

Maggie noticed that her financial record is missing information. She recalls that on October 15th, she purchased gasoline in the amount of $32.51 and on October 16th, she and her friends went out for dinner, where she spent $25.62. Given this information, and the image below, determine her balance as of October 26th.

A

Ana is retiring next year from the school that she has taught at for the last 25 years. Her pension pays a monthly salary of $1,562.32. She also receives a monthly income from an IRA that she has made regular monthly payments, in the amount of $230.32, for the last 15 years. If Ana plans on using her pension and the funds from her IRA as her primary source of income for the next 10 years, determine Ana's monthly income given that her IRA compounds interest at 2.3% monthly. Round to the nearest cent. a. $2,024.02 b. $1,887.42 c. $461.70 d. $325.10

A

Suppose that a family wants to start a college fund for their child. If they can get a rate of 5.5% , compounded monthly, and want the fund to have a value of $35,450 after 20 years, how much should they deposit monthly? Assume an ordinary annuity and round to the nearest cent. a. $81.38 b. $80.01 c. $11,829.97 d. $11,776.00

A

Susan is paying $0.30 per $100 on her $483,000 home in homeowners insurance annually. If her annual homeowners insurance premium is divided into twelve equal monthly installments to be included on each of her monthly mortgage payments of $2128.00, what is her total monthly payment? a. $2,248.75 b. $2,409.75 c. $3,381.00 d. $3,577.00

A

Four friends want to take a vacation together, so each one gets a part-time job. Each person has 8 weeks to save $720 for the vacation. Analyze the four individual plans below and decide which of the four people will reach his or her goal of saving $720 for vacation. Friend A: Works 13 hours per week at $6.95 per hour. Friend B: Works 15 hours per week at $5.85 per hour. Friend C: Works 18 hours per week at $5.25 per hour. Friend D: Works 11 hours per week at $7.80 per hour. a. A and C b. A and D c. B and C d. B and D

A

Frances bought 144 shares of Dwyn Horticulture for $7.73 apiece. Her broker charged her a commission of $46.15 for the purchase. If the yearly dividend on Dwyn Horticulture is 61 cents per share, what is the annual yield on Frances's stock? a. 0.0758 b. 0.0789 c. 0.0132 d. 0.0320

A

Frank and Lynn are co-workers getting paid the same salary. They both decide to quit their jobs and start going to school on the same day. Frank gets a degree after just 18 months and spends $6,500 dollars on his education. Lynn only spends $3,500, but it takes her 2 years to get her degree. Assuming that they each will make $6,000 more per year after graduating, which of the following is true? a. Frank will recover his investment at an earlier date than Lynn. b. Lynn will recover her investment at an earlier date than Frank. c. Frank and Lynn will recover their investments on the same date. d. There is not enough information given to know who will recover their investment first.

A

George tallies up the transactions in his check register and comes up with a total balance of $221.57, but his bank statement says that his balance is $203.73. Which of the following are still outstanding? I. A $20.25 check to the florist II. A $14.29 check to the dry cleaners III. A $38.09 check deposit IV. A $19.05 money order deposit a. I and III b. I and IV c. II and III d. II and IV

A

Given the following information, determine if one of the brands is a better buy. Brand A: 14 ounces for $44.66 Brand B: 20 ounces for $63.80 a. Both brands cost the same per ounce. b. Brand A is the better buy. c. Brand B is the better buy. d. There is not enough information provided to determine the better buy.

A

Hank is a salaried plus commission employee. Hank has a monthly salary of $2,500 and earns 5.5% commission on all sales. Which of the following expressions represents Hank's total earnings in one month if he has $6,300 in sales? a. 2,500 + (0.055)(6,300) b. 2,500 + (5.5)(6,300) c. (2,500) (5.5) + 6,300 d. (2,500) (0.055) + 6,300

A

Health insurance helps to protect you from financial loss by _____. a. paying for some or all of your medical costs while you are insured. b. working with medical care providers to minimize or discount the total cost of medical care. c. connecting you with health care representative to help keep you in good medical condition to avoid excessive medical care costs. d. informing you about lectures, classes, and presentations that help inform you about maintaining good medical condition to avoid excessive medical care costs.

A

If Jesse wants to buy a $75,000 10-year term life insurance policy, and the annual premium rate (per $1000 of face value) for his age group is $2.34, how much is Jesse's annual premium? a. $175.50 b. $3,205.12 c. $234.00 d. $1,755.00

A

What are you primarily doing when you reconcile your checking account? a. Making sure the bank spelled your name properly. b. Making sure that your records match your bank's records. c. Writing down the transactions that your bank automatically records so you don't have to. d. Calling the bank to check the dates on each transaction.

B

What does it mean to be "in the red?" a. You have more credits than debits. b. You have more debits than credits. c. You cannot find your financial records. d. Your financial records are inaccurate.

B

What is "house flipping?" a. The process of transferring ownership of a house from one person to another. b. The process of buying a house with the intention of selling it for a profit after only a short time. c. The process of two people exchanging the titles to their properties. d. The process of a house's market price rapidly fluctuating.

B

What is a stock index? a. The average change in a stock's price over a given period. b. An indicator of market strength based on the prices of several specific stocks. c. A listing of all stocks available in a specific market. d. The current number of stocks in your portfolio.

B

What is meant by the term financial planning? a. Long-term goals are reached over an extended period of time, so your current income does not affect them. b. It is creating a road map of everything you do with your money. c. It is hoping you will have enough money to pay all your bills on time. d. If your income exceeds your expenses, you will be able to save money for the future.

B

What is the basic difference between liability insurance and collision insurance? a. Liability insurance covers only medical injuries, and collision insurance covers only property damage. b. Liability insurance covers damage that you cause, and collision insurance covers damage done to your vehicle. c. Liability insurance is optional, but most states require collision insurance. d. Liability insurance protects against theft or vandalism, and collision insurance covers against accidents or crashes.

B

In order to make premiums more affordable for their customers, Leroux Health Insurance is considering some changes to one of the plans they offer. Both the current options and proposed changes are outlined in the charts below. If Kevin is currently insured under Leroux for his medical insurance under Plan A, how will the proposed changes affect his health care costs? a. Costs for regularly scheduled health care will go down, but Kevin may end up paying more if he finds himself seriously ill or injured. b. Costs for regularly scheduled health care will go up, but Kevin will probably pay less than he would have if he finds himself seriously ill or injured. c. Both the cost for regularly scheduled health care and the cost for emergency health care will go down, making the changes very good for Kevin. d. Both the cost for regularly scheduled health care and the cost for emergency health care would go up, contradicting the intentions of Leroux Insurance.

A

Isaiah is trying to decide if the interval use plan is better than the standard use plan for his electricity consumption. Calculate the monthly costs of both plans if he uses 1,275 kWh of electricity per month with 575 kWh on-peak usage and the rest off-peak usage. Standard Use Plan Interval Use Plan 7.5 cents/kWh for the first 400 kWh 10 cents/kWh for anything over 400 kWh On-peak hours - 15 cents/kWh Off-peak hours - 3 cents/kWh a. standard use plan - $117.50; interval use plan - $107.25 b. standard use plan - $87.50; interval use plan - $86.25 c. standard use plan - $117.50; interval use plan - $86.25 d. standard use plan - $87.50; interval use plan - $107.25

A

What is the largest difference in stocks and bonds? a. Bonds are a binding contract, promising the holder a portion of the company's annual profit, unless it is unprofitable, while stocks are a very standard investment and pay off a predetermined amount after a period of time. b. Stocks are a share of ownership in a company and give the stockholder voting rights, while bonds are similar to lending a company or government money. c. Stocks are the most secure of all investments and bonds are some of the least secure. d. Bonds are available to the public, while stocks are reserved for the financial elite.

B

What kind of taxes are likely to pay for universities and police? a. local taxes b. state taxes c. federal taxes d. income taxes

B

It is important to re-evaluate financial goals periodically. In which of the following situations would it be necessary to change an existing financial goal? a. You fell sharply behind your expected schedule with regard to saving. b. You recovered from an unexpected expense and are rattled that you did not see it coming. c. You married, and your spouse has a similar financial goal. d. You came across unexpected income.

A

What kind of warranty is often offered not through the manufacturer but instead through a third party? a. manufacturer's warranty b. extended warranty c. full warranty d. limited warranty

B

What was the value of the third check Tony deposited? a. $617.60 b. $105.20 c. $31.28 d. $36.76

B

When must you sign a deposit slip? a. You must always sign a deposit slip. b. You only need to sign a deposit slip when receiving cash. c. You only need to sign a deposit slip when using an ATM, rather than depositing at the bank. d. You never need to sign a deposit slip. Your account information is enough.

B

When preparing a monthly budget, describe how net income is calculated. a. Net income is calculated by taking the expenses subtotal and subtracting the income subtotal. b. Net income is calculated by taking the income subtotal and subtracting the expenses subtotal. c. Subtracting the expenses subtotal from the net income will give you the income subtotal. d. Adding the expenses subtotal to the net income will give you the income subtotal.

B

Jessie wants to open a checking account to pay bills. She wants a starter book of checks, plus free online bill payment services. She analyzes the following statements of fees from Good Bank and Great Bank. Based upon past experience, Jessie expects to accidentally overdraft the account about 3 times per year, unfortunately all in the same month, due to unexpected charges and miscommunications. She expects no 2nd copies of statements, and to use network ATMs 4 times per month with either bank. Based on the tables of fees, which bank can be reasonably expected to cost Jessie the least amount in fees per year? a. Good Bank will have the least amount in fees per year. b. Great Bank will have the least amount in fees per year. c. Good Bank and Great Bank would have the same costs for Jessie. d. The fees can simply not be estimated in advance, so no decision should be made.

A

Joseph paid $105,000 for his home twenty years ago. Since then, his house has increased its property value by 2.0% every year. In addition, Joseph has made renovations and improvements to the house which will increase its sale value by $28,700. If Joseph sells his home, how much profit will he make, to the nearest hundred dollars? a. $79,700 b. $84,700 c. $93,700 d. $122,400

A

Justin is married with one child. He works 40 hours each week at a rate of $16 per hour. His wife began working part time after their daughter was born, but still contributes about $350 to the cash inflow each month. Their monthly cash outflow is generally about $3,000. They have a balance of $2,000 in their savings account. Justin has retirement contributions taken out of his paycheck at work. They have renter's, car and life insurance coverage. Based on this information, what part of their financial plan should Justin and his wife work on? a. managing income b. managing liquidity c. protecting assets d. retirement

A

Kito makes on online purchase of a guitar case for $39.99, a tuner for $24.99 and picks for $26.99. Taxes are 6% of the total purchase price. Shipping charges are based on the following table: Kito selects express shipping and the company bills his credit card $105.69 for the total of the online purchase. Determine if Kito has been billed correctly for his purchase. a. Kito has been billed correctly. b. Kito has not been charged enough for his purchase. c. Kito has been over charged by $1.85 for his purchase. d. Kito has been over charged by $3.40 for his purchase.

A

Lonnie is considering doing some long term investing with money that she inherited. She would like to have $50,000 at the end of 30 years. Approximately how much money would Lonnie need to put into an account earning 6% interest compounded annually in order to meet her goal? a. $8,706 b. $9,000 c. $27,778 d. $40,690

A

Which of the following is an example of a passive income? a. receiving money from selling stocks b. receiving royalties from writing a book c. making money from selling a motorcycle d. making money by getting paid a salary

B

Lucy will open a checking account and 3 savings accounts for different purposes (emergency fund, gift fund, and education fund). Which of the following items should not be among her main considerations in selecting these accounts? a. The account recommended for somebody with different needs. b. The amount of interest to be paid on deposits. c. Any advantages of having all the accounts at the same bank. d. Fees for having multiple savings accounts.

A

Luis wants to buy a home priced at $315,000. He plans to finance this amount less the down payment required. His mortgage payment would then be $2100. Luis has an annual income of $91,500 and $65,000 in savings. Luis has a car payment of $370, a student loan payment of $165 and a credit card payment of $45. Use a 20% down payment and the 28/36 ratio to determine if Luis is eligible for a loan. What would you advise him to do if he is not eligible? a. Luis is eligible for a home loan; he meets all of the requirements. b. Luis is not eligible for a home loan; he should continue to save for a down payment. c. Luis is not eligible for a loan; he should look for a cheaper house. d. Luis is not eligible for a loan; he should reduce his recurring debt.

A

Manny has just filled out his deposit ticket for his savings account. He hands it to the teller and the teller hands it back to Manny. The teller explains to Manny that the deposit ticket cannot be accepted in its current form. What must Manny do to the deposit ticket in order for the teller to process the deposit ticket? a. Manny forgot to sign the deposit ticket for less cash back b. The subtotal is calculated incorrectly c. The total is calculated incorrectly d. Manny forgot to date the deposit ticket

A

Marco's bank statement says that he has an ending balance of $81. What is Marco's starting balance? a. $255 b. $93 c. $174 d. $210

A

Mario spent a total of $87.33 last week, but did not keep a perfect record of where his money went. Fortunately, Mario does have all but one of his receipts. He enters all of the information he has into his expense spreadsheet as shown below. How much did Mario spend on golfing?

A

Mary pays income tax according to the graduated schedule shown below. If Mary's taxable income is $68,562, how much income tax does she owe, rounded to the nearest dollar? a. $13,564 b. $17,140 c. $21,527 d. $12,349

A

Mrs. Jones has received her bank statement and is ready to reconcile it with her checkbook register. Fill out the reconciliation worksheet for Mrs. Jones using the data from her bank statement and checkbook register. Assume all transactions on previous pages have already cleared. Consider what must be done, if anything, in order to finish the reconciliation process. a. Line 6 is $10.00 higher than line 5; look back at the statement to find the discrepancy. b. Any transaction that appears on the register must still be added to the bank statement. c. Add lines 5 and 6 together. d. The rent of $600 is in your checkbook but not on your bank statement.

A

Which of the following is not something you should consider when evaluating an investment advisor? a. Their experience b. Whether or not they are registered with FINRA c. Whether or not they are registered with the SEC d. Their educational background

B

Which of the following is true? a. net cash flow - cash outflow = cash inflow b. net cash flow + cash outflow = cash inflow c. net cash flow + cash inflow = cash outflow d. cash inflow + cash outflow = net cash flow

B

Which of the following products represents 6.75% tax, in dollars, on a price of $14.29? a. (0.00675)(14.29) b. (0.0675)(14.29) c. (0.675)(14.29) d. (6.75)(14.29)

B

Which of the following statements are true about WaterSense toilets? a. WaterSense toilets prevent toilet leaks b. WaterSense toilets saved customers 9.3 billion gallons of water in 2008 c. WaterSense toilets come with attached float booster d. WaterSense toilets use about 5-7 gallons of water per flush

B

Predict how much money can be saved without having a negative actual net income. a. It is not possible to save any money this month without having a negative actual net income. b. $350 can be saved resulting in an actual net income of $0. c. $200 can be saved resulting in an actual net income of $75. d. Because there is a $75 budgeted net income, that $75 can be put towards savings.

A

Rachel just purchased a homeowners insurance policy for her new home that costs $0.43 per $100. Her home is worth $387,500. What is Rachel's annual homeowners insurance premium? a. $1,666.25 b. $2,208.75 c. $8,802.33 d. $9,011.63

A

Rank the following kinds of bonds in order from least secure to most secure: Municipal, Corporate, Treasury a. Corporate, Municipal, Treasury b. Treasury, Corporate, Municipal c. Treasury, Municipal, Corporate d. Municipal, Corporate, Treasury

A

Rauol made an investment in 155 shares of stock in a load fund for $3,117.05. After one year the stock had a net asset value of $18.35 per share. If Rauol redeems all 155 shares, which of the following is a correct statement? a. Rauol will have a loss of $272.80. b. Rauol will have a profit of $272.80. c. Rauol will have a profit of $2,844.25. d. There is not enough information to calculate profit or loss.

A

Rose and Dennis each open a savings account at the same time. Rose invests $2,600 in an account yielding 4.1% simple interest, and Dennis invests $2200 in an account yielding 5.7% simple interest. After nine years, who has the greater total amount of money, and how much greater is it? a. Rose has $230.80 more than Dennis. b. Rose has $559.40 more than Dennis. c. Dennis has $169.20 more than Rose. d. Dennis has $512.00 more than Rose.

A

Ruby wants to start her own business taking photographs. She already has her own camera, but needs to purchase lights, a photo printer, and photo paper. If the cost of the photo printer is $251.99, the cost of lighting is $150.00, and the cost for 100 sheets of photo paper is $30.98, determine how much of her savings will be used to start her company, given that she has $840.32 in savings. a. $432.97 b. $840.32 c. $432.62 d. $407.35

A

Sal and two of his friends rent an apartment together. Their total cost to move in included first month's rent, last month's rent and a security deposit of $1,200. If Sal paid a total of $1,000 to move in, how much is his share of the rent each month? a. $300 b. $450 c. $600 d. $900

A

Sarah is 27 years old and is retiring at the age of 65. When she retires, she estimates that she will need a semiannual income for 20 years. If Sarah contributes 9% of her semiannual income of $18,567.11 to a 401(k) paying 6.1% compounded semiannually, approximately what semiannual income will she be able to draw? (Hint: Find the future value of her investment prior to retirement and use that amount as her investment amount upon retirement) a. $21,050.02 b. $21,692.05 c. $20,407.99 d. $14,629.72

A

Suppose that a family wants to start a college fund for their child. If they can get a rate of 5.2%, compounded monthly, and want the fund to have a value of $55,500 after 20 years, how much should they deposit monthly? Assume an ordinary annuity and round to the nearest cent. a. $131.93 b. $2,662.49 c. $1,643.30 d. $3,446.64

A

The Long family spent $38.62 for school supplies and $215.78 for new school clothes. They paid 6.8% sales tax on their purchases. If the Long family paid $269.07 total, determine if they paid the correct amount. a. The Long family paid $2.63 too little for their purchases. b. The Long family paid the correct amount for their purchases. c. The Long family paid $1.61 too much for their purchases. d. The Long family paid $2.63 too much for their purchases.

A

The Reed and the Merrill families are comparing their utility costs for the past month. The following is a list of the appliances that the families are using to make their comparisons: Reed Family Appliances Merrill Family Appliances Gas range 5 cents per day Electric range 13 cents per day Gas dryer - 1 load per day 10 cents per load Gas dryer - 1 load per day 10 cents per load Electric water heater 90 cents per day Gas water heater 40 cents per day Typical later model refrigerator 16 cents per day Energy Star-labeled refrigerator 12 cents per day Assuming that the families use the same appliances in the same way, who spends more to run these appliances in a given 30 day period and by how much?

A

The earnings of two employees are given below: Employee A: 6% commission on all sales Employee B: 4% commission on the first $80,000 and 8% on anything over $80,000 How much more does a straight commission employee make than the graduated commission employee for sales of $100,000? a. $1,200 b. $1,600 c. $2,000 d. $3,200

A

The following list shows the items and prices for a restaurant order. Calculate the total amount if there is 7.5% tax and the customer leaves a 15% gratuity. 1 appetizer: $8.99 2 entrees: $14.99 each 1 entree: $12.99 3 drinks: $1.99 each a. $70.96 b. $71.62 c. $75.31 d. $75.97

A

The following table shows the assets and liabilities of the Smith family in 2005 and 2009. 2005 2009 home valued at $200,000 home valued at $180,000 mortgage of $30,000 home equity loan of $18,000 car valued at $25,000 car valued at $18,000 car loan of $8,000 boat valued at $20,000 personal loan of $5,000 Based on the table, which of the following is true? a. From 2005 to 2009, both assets and liabilities decreased. b. From 2005 to 2009, both assets and liabilities increased. c. From 2005 to 2009, assets decreased and liabilities increased. d. From 2005 to 2009, assets increased and liabilities decreased.

A

The national average utility cost is $270.48 per month. If the average electric bill is 44.9% of the total amount and the average utility cost for Orlando, FL is $308.83, what would be the cost of a typical Orlando electric bill and how would that compare with the national average? a. The typical Orlando electric bill would be $138.66, which would be $17.21 more than the national average. b. The typical Orlando electric bill would be $121.54, which would be $17.21 less than the national average. c. The typical Orlando electric bill would be $138.66, which would be $76.64 more than the national average. d. The typical Orlando electric bill would be $121.54, which would be $76.64 less than the national average.

A

The table below is comparing level of education achieved to the rate of unemployment and the median weekly earnings in 2008. Based on the information provided, the unemployment rate decreases the most when moving between which two consecutive educational levels?

A

The table below shows the earnings, in thousands of dollars, for three different commissioned employees. Employee #1 $2,000 + 3% on all sales Employee #2 7% on all sales Employee #3 5% on the first $40,000 + 8% on anything over $40,000 December 4.4 5.6 5.2 January 3.5 3.85 3.6 February 4.7 4.9 4.4 Which employee did not have the same dollar amount in sales for the month of February as the other two employees? a. Employee #1. b. Employee #2 c. Employee #3 d. They each had the same dollar amount in sales.

A

Tony invested $5,500 in a four-year CD that paid 4.8% interest, but later needed to withdraw $475 early. If the CD's penalty for early withdrawal was three months' worth of interest on the amount withdrawn, how much of a penalty did Tony pay? a. $5.70 b. $22.80 c. $60.30 d. $66.00

A

Tracy buys 150 shares of Upton Group and 100 shares of WHI Health. What is Tracy's total investment? a. $4,940.00 b. $5,040.00 c. $5,914.50 d. $5,988.00

A

Tracy was involved in an accident in which the other driver suffered severe injuries. The police determined that the accident was Tracy's fault. Tracy is fully insured through her insurance company. Which of the following components of Tracy's insurance policy will cover the injuries of the other driver? a. bodily injury b. property damage c. collision d. comprehensive damage

A

Two people quit work and begin college at the same time. Their salary and education information is given in the table below. Salary prior to school Years attending college Total cost of college Salary upon graduating Person A $18,000 3 $45000 $33,000 Person B $27,000 4 $30,000 $37,000 Choose the true statement. a. Person A recovers their investment in a shorter amount of time. b. Person B recovers their investment in a shorter amount of time. c. They recover their investments in the same amount of time. d. There is too little information to compare the time to recover their investments.

A

Using the 28/36 ratio, determine the maximum allowable recurring debt for someone with a monthly income of $3,200. a. $256 b. $512 c. $640 d. $896

A

Using the 28/36 ratio, determine the maximum allowable recurring debt for someone with an annual income of $86,250. a. $575.00 b. $2,012.50 c. $2,415.00 d. $2,587.50

A

Using the following prices, calculate the unit price to determine how much it would cost for 7 granola bars and 9 bottles of water. $7.14 for 6 granola bars $8.72 for 8 bottles of water a. $18.14 b. $18.63 c. $21.41 d. $31.72

A

Using the following prices, calculate the unit price to determine how much it would cost for 7 muffins and 14 juice boxes. $7.74 for 6 muffins $5.52 for 8 juice boxes a. $18.69 b. $19.89 c. $21.91 d. $26.52

A

Vanessa bought a house for $268,500. She has a 30 year mortgage with a fixed rate of 6.25%. Vanessa's monthly payments are $1,595.85. How much was Vanessa's down payment? a. $9,314.45 b. $16,781.25 c. $40,275.00 d. $53,040.00

A

Which of the following statements is always true? a. Workers being paid on commission make less money than if they are salaried. b. Workers being paid on commission get paid based solely on their performance. c. Workers being paid on commission are stressed over the amount of earnings they will have. d. Workers being paid on commission increase the accounting costs of the employer.

B

Which of the following statements is not something you should be thinking when considering changes in your auto insurance policy? a. Higher deductibles mean lower premiums but more out-of-pocket expense in the event of an accident. b. The premium you pay guarantees that you will never have to pay more than your deductible in the event of an accident. c. The more types of insurance you include in your policy, the more protected you are from financial loss in the event of an accident. d. Lower coverage limits mean lower premiums but more restrictions on the insurance company when covering injuries and damage resulting from an accident.

B

Which of the following would be a good reason to place your money into a savings account? a. You can purchase stocks with a savings account b. A savings account earns interest c. You can write checks with a savings account d. You can use a debit card to make transactions

B

Which of the following would least likely be used to determine your eligibility for a home loan? a. credit history report b. current utility bills c. recurring debt total d. savings account balance

B

Which of the following would you list under cash inflows in a financial plan? a. You took a friend to lunch. b. You received a bonus at work. c. You got a discount on a new computer. d. You paid interest on a loan

B

Which statement below gives the best reason for considering personal needs, values, and circumstances in selecting a bank account? a. Fees do not matter; only what the person has heard is a good feature in a bank. b. This information can lead to a better match between account features and the person's needs. c. The best bank account is simply the best bank account for everybody. d. Opening an account should be done by chance so that personal biases do not interfere.

B

While driving recklessly, Thomas lost control of his car and accidentally drove it into the water fountain in his neighbor's front yard. Thomas is fully insured through his insurance company. Which of the following components of his insurance policy will cover the damage he caused to his neighbors fountain? a. bodily injury b. property damage c. collision d. comprehensive damage

B

Without buying points, a monthly mortgage payment will be $1,250. Buying 1 point at closing would reduce the payment to $1,236. To the nearest year, how long would it take to break even by buying 1 point, with a $100,000 mortgage? a. 5 years b. 6 years c. 7 years d. 8 years

B

Wyatt uses a notebook for keeping financial records. He has placed dividers in the notebook so that it has different sections. Each divider also has a pocket for keeping receipts or other papers related to the records in each section. Wyatt keeps his notebook in his locker at school. Which of the following things about Wyatt's system of record keeping provides a way to separate his financial details into different categories? a. The fact that financial records are kept in the notebook. b. The fact that the notebook.has section dividers c. The fact that the section dividers have pockets. d. The fact that the notebook is kept in his locker.

B

Viola has to relocate for her job. She finds a townhome with an option to rent or buy. The conditions of each are shown below. Rent: Move-in costs of $2,380 and monthly payment of $845. Buy: Move-in costs of $5,260 and monthly payment of $785. Viola moves frequently due to her job, but she thinks that she will stay in the area for 4 years. Therefore, she decided to buy. Choose the best evaluation of Viola's decision. a. Since the costs would be the same over the 4 year period, she will have made a good decision if the property value does not decrease. b. She made a fairly good decision. Buying the townhome will be cheaper over the 4 year period as long as she doesn't have major repairs to make. c. She made a poor decision if the property value does not increase. Renting the townhome would be cheaper over the 4 year period. d. There is not enough information given to determine which option is best.

A

You work for a lender that requires a 20% down payment and uses the standard debt-to-income ratio to determine a person's eligibility for a home loan. Of the following, choose the person that you would rate the highest on their eligibility for a home loan?

B

What does it mean for a savings account to have a minimum balance? a. If you do not keep at least that much money in the account, you will be assessed fees. b. If the amount of money you have in the account drops below the minimum, the interest rate will increase to replenish your savings to the minimum. c. You must have the minimum amount of money in a separate account before you are allowed to open a savings account. d. You must deposit that much money into the account every month or your account will be closed.

A

What does it mean that stocks and bonds are relatively liquid? a. They are easier to buy and sell than other forms of investment. b. They tend to go up and down in value. c. The amount of income they can bring changes frequently. d. There are more of them to choose from than other forms of investment.

A

What is the actual net income for the month? What, if any, changes could have been made to the actual amounts this month to keep the actual net income at a positive value? a. The actual net income for the month is -$85. Less money could have been spent on food, recreation and clothes. b. The actual net income for the month is $85. No changes necessary. c. The actual net income for the month is -$85. No changes necessary. d. The actual net income for the month is $85. Less money could have been spent on food, recreation and clothes.

A

What is the purpose of the Electronic Funds Transfer Act? a. It limits your liability if your ATM card is stolen. b. It limits the amount of money that can be electronically transferred between two bank accounts in one day. c. It monitors the amount of money that banks transfer electronically. d. It charges a tax on money transferred electronically.

A

When 500 phone books are recycled, which of the following statements is false? a. conserves around 9 cubic yards in landfill space b. conserves around 17-31 trees c. conserves around 4,077 kilowatt hours of energy d. conserves around 463 gallons of oil

A

Which of the following is a benefit Social Security does not offer? a. automobile insurance b. disability insurance c. retirement insurance d. survivor insurance

A

Which of the following is not a good plan for achieving goals? a. Set goals higher than what you feel you can achieve. b. Be positive about achieving your goals. c. Continue to monitor your plan for achieving your goals. d. Keep reminding yourself of your goals.

A

Which of the following is not a promotional tactic used by a seller? a. bait and switch b. clearance c. closeout d. liquidation

A

Which of the following is not a way in which the Federal Reserve ("the Fed") and its policies affect banks? a. The Fed sets a maximum on the interest rates banks can charge for loans or credit. b. The Fed's required reserve policy limits how much money banks can lend out. c. The Fed determines at what price banks must lend money to one another. d. The Fed serves as "the bank's bank," lending other banks money when necessary.

A

Which of the following is something that will not affect your homeowners insurance premium? a. the distance of the home from a school b. the distance of the home from a flood plain c. the distance of the home from a fire station d. the distance of the home from a fire hydrant

A

Which of the following is used by a seller to deceive a buyer? a. bait and switch b. contest c. display d. introductory offer

A

Which of the following most accurately describes when a debit card transaction takes effect? a. The transaction is completed almost immediately after making the purchase. b. The transaction takes two to three business days to clear. c. All debit card transactions are processed simultaneously at the end of the day. d. Debit card transactions are completed when you pay your monthly debit card bill.

A

Which of the following services will be provided by a full-service broker but not by a discount broker? I. Research of potential investment opportunities II. Purchase and sale of stock at your request III. Recommendation of investments a. I and III b. II only c. III only d. I, II, and III

A

You work for a lending institution and are tasked with whether or not to approve a home loan. All applicants are required to have a 20% down payment, and the standard 28/36 ratio is used The loan application is for $230,000. You see that the applicant has an annual salary of $83,000 and a savings account balance of $50,000. The applicant also has a car payment of $315, a student loan of $140 and a boat loan of $96. How likely are you to approve the loan? a. Very likely; recurring debt is considerably less than what is allowed. b. Somewhat likely; recurring debt is very close to what is allowed. c. Not likely; recurring debt is higher than what is allowed. d. There is not enough information given to determine the answer.

B

Your broker charges you 2.5% commission on the market value of bonds you buy or sell. If you wish to buy a par value $1,000 bond from Cuyahoga County with a market rate of 86.681, approximately how much will you owe your broker? a. $25.00 b. $21.67 c. $89.18 d. $27.17

B

Your monthly living expenses are $1500 on an income of $1,650 per month. Your goal is to have an emergency fund of 4 times your monthly living expenses. Your emergency fund savings account has $2,400 and you put the remainder of your monthly income into the emergency fund each month. How much more money would you have to save each month to complete your emergency fund in 12 months? a. $300 per month b. $150 per month c. $75 per month d. $60 per month

B

Zalia meets her friend at the science museum to see a special exhibition. The admission to the museum is $12.50 plus tax. Zalia pays for herself and her friend. They have lunch at the museum's cafe. Zalia has a sandwich for $5.95, an apple for $1.25 and a drink for $1.69. She is charged tax and also tips her server 15%. If tax is 7.25%, how much did Zalia pay all total for her day at the science museum? a. $41.43 b. $37.68 c. $36.35 d. $24.27

B

Which of the following statements best describes the difference between sales tax and property tax? a. Sales tax is applied to items as they are purchased while property tax is applied to items already owned. b. Sales tax is applied repeatedly while property tax is paid only once for as long as you own the item. c. Sales tax can be applied to a new speed boat while property tax cannot. d. Sales tax is strictly meant for food and consumables while property tax is meant for non-food items.

A

Which of the following statements best gives the reasons that a data usage bill for a smart phone is an essential (variable) expense? a. It is an obligation to pay, but the spender has some control over its amount. b. It cannot be eliminated in a later budget, in order to save money. c. It is expected to be the same amount every month. d. Bills for services rendered have a higher priority than any other type of expense.

A

Which of these statements is most accurate regarding mortgage payments through the life of your loan? a. At the beginning of your loan, your payments are covering mostly interest. At the end of your loan, your payments are covering mostly principal. b. The amount for your mortgage payments will decline over the life of your loan. c. The amount of interest paid per mortgage payment will remain the same over the life of your loan. d. The amount of principal paid per mortgage payment will decrease over the life of your loan.

A

Why do certificates of deposit tend to offer better interest rates than money market accounts? a. Certificates of deposit involve a longer time commitment than money market accounts, so they carry a greater return. b. Certificates of deposit are only available to the bank's most proven and valuable customers, so the bank can afford to give a greater interest rate on them. c. They do not offer a better interest rate. Money market accounts tend to have the best interest rates of any bank deposit. d. Money market accounts invest your money but sometimes lose some of it, so the lower interest rate pays for the difference.

A

Why is it sometimes easier to open an account with a bank rather than with a credit union? a. Most credit unions require some kind of affiliation, but banks will let anyone with money open an account. b. Credit unions usually require more paperwork than banks. c. Banks can generally open an account immediately, but credit unions require a waiting period. d. Banks can open accounts over the phone or online, but credit unions can only open accounts in person.

A

You make $443 per week, and have claimed five exemptions. How much money will be withheld from you in a year?

A

You put $125.32 at the end of each month in an investment plan that pays 2.5% interest, compounded monthly. How much will you have after 23 years? Round to the nearest cent. a. $46,683.28 b. $4,564,471.88 c. $2,949.39 d. $3,832.84

A

Gareth bought a home for $135,000. The home gained 2.2% in value every year for eight years until Gareth sold it. How much profit did Gareth make, to the nearest hundred dollars? a. $60,700 b. $25,700 c. $23,800 d. $29,100

B

In what range do the closing costs on a home loan typically fall? a. 1% to 3% b. 3% to 5% c. 5% to 7% d. 7% to 10%

B

Social Security offers all but which of the following benefits? a. retirement insurance b. home loans c. survivor insurance d. disability insurance

B

What was Art's total deposit? a. $1,701.23 b. $1,545.83 c. $1,856.63 d. $1516.35

B

A box of candy weighs 340.23 grams and costs $18.99. If 1 gram is approximately 0.03527 ounces, what is the unit price per ounce of the candy? a. $0.53 b. $0.67 c. $1.58 d. $1.97

C

How much did Kay deposit in cash and coins? a. $404.57 b. $213.51 c. $93.44 d. $284.50

C

Tyrell is gearing up for the football season and decides to purchase some items online. He has a promotional code for a one time $10 off any purchase of $50 or more. Tyrell orders 2 new jerseys at $32.89 each and a hat for $23.99. Tyrell pays 7% sales tax on his purchase, but pays no shipping charges. What is the total of Tyrell's online purchase? a. $50.16 b. $79.77 c. $85.35 d. $96.05

C

Which legally required form divulges information about financial advisors? a. Form DAV b. Form AVD c. Form ADV d. Form DVA

C

Which of the following is something you would not expect to see withheld from your paycheck? a. federal income tax b. state income tax c. sales tax d. Social Security

C

Carmen buys 153 shares of Cawh Consolidated Banks, each of which pays a constant yearly dividend of $7.14. After six years, how much has Carmen received in dividends? a. $5,783.40 b. $1,820.70 c. $1,092.42 d. $6,554.52

D

Last year Lenny had an annual earned income of $58,475. He also had passive income of $1,255, and capital gains of $2,350. What was Lenny's total gross income for the year? a. $58,475 b. $59,730 c. $60,985 d. $62,080

D

Scott earns $16.85 per hour at his job. He works 7 hours per day, 4 days per week. What is Scott's gross monthly income for 4 weeks? a. $471.80 b. $943.60 c. $1,415.40 d. $1,887.20

D

Today, you sold the 459 shares of Rayje Clothiers that you purchased yesterday. How much profit did you make? a. $13,985.73 b. $11,520.90 c. $5,338.17 d. $6,306.66

D

Tyrone's hourly wage is $18 and his net pay is 72% of his earnings. Tyrone spends about $1,800 on his monthly expenses. If Tyrone works 40 hours per week and has no other sources of income, what is his total monthly cash inflow? (Hint: Assume that there are 4 pay periods per month.) a. $273.60 b. $1,080.00 c. $1,800.00 d. $2,073.60

D

A graduated commission employee makes 3.5% interest on the first $50,000 in sales and 6.5% interest on all sales over $50,000. Which of the following expressions represents the employee's total earnings on $81,500 in sales? a. (0.035)(50,000) + (0.065)(81,500) b. (0.035)(50,000) + (0.065)(31,500) c. (0.35)(50,000) + (0.65)(31,500) d. (3.5)(50,000) + (6.5)(31,500)

B

A married couple buys 280 shares of stock for a total investment of $8,722. They decide to sell all of their shares in the fund at the listing value shown below. Determine if the couple makes a profit or loss, and how much per share. a. loss of $0.05 per share b. loss of $0.10 per share c. profit of $0.05 per share d. profit of $0.10 per share

B

A mutual fund's net asset value increases by $5 per share. An investor who owns 450 shares of this fund sells them all for a profit of $2,205. What can you conclude about the fund? a. The fund is a no-load fund. b. The fund had a $0.10 per share commission when purchased. c. The fund had a $1.00 per share commission when purchased. d. The fund had a $0.10 per share commission when sold.

B

A savvy shopper combines a 25% off coupon with the store's existing 25% off sale. Ignoring sales tax, how much of the base price should the shopper expect to pay? a. 75% b. 56.25% c. 50% d. 43.75%

B

A tip employee's earnings most closely resemble those of which of the following? a. An employee working on straight commission b. An employee working on commission plus salary c. An employee working on a piece-rate basis d. An employee working on a fixed salary

B

After being involved in a car accident last month, Ralph's insurance company has increased his annual premium by $105.38. Approximately what change will Ralph see on his future monthly statements as a result of the change? a. Ralph's monthly insurance payment will not change. b. Ralph's monthly insurance payment will increase by $8.78. c. Ralph's monthly insurance payment will increase by $17.56. d. Ralph's monthly insurance payment will increase $105.38.

B

Alistar has an annual income of $25,000. He decides to take classes on line and at night so that he can continue to work. After 3 years he gets his degree and immediately starts earning $32,000 per year. If it takes Alistar 6 years to recover his investment for his education, how much did it cost him? a. $21,000 b. $42,000 c. $63,000 d. $150,000

B

Allie and Sarah decided that they want to purchase renters insurance for the apartment they share. They made a list of all of the items to be covered by the insurance policy, along with their estimated values. If the items to be covered total more than $3000, the insurance company charges an annual premium of 23% of the total value of the items. If the items to be covered total $3000 or less, the insurance company charges an annual premium of 20% of the total value of the items. Using the list of items Allie and Sarah provided, determine their monthly renters insurance premium.

B

An employee has an annual salary of $51,300. They receive $2,830 in health insurance and $4,600 in paid time off per year. They drive their personal vehicle for work which costs them $600 per month, but the company reimburses them $0.54 per mile for the total work miles driven. If the employee drives 36,000 miles for work for the year, what will be their total employment compensation? a. $70,740 b. $70,970 c. $77,570 d. $78,170

B

Assume that you are going to open a checking account. You are examining different banks and banking accounts to choose a bank account for your needs. Which of the following statements should not be one of your reasons for examining different banks? a. Being more informed leads to being better prepared to make financial decisions. b. Bank E offers you a chocolate bar for filling out an application for checking and credit at the same time. c. Banks could have charges that you do not know about until reading carefully. d. You will become more aware of how well the banks meet your particular needs.

B

Barry wants to open a checking account. He wants online services, and a debit card. He is looking at the following tables of fees from his employer's credit union, EECU, and a local bank, E-town Bank: Based upon past experience, Barry expects no overdrafts. He expects no 2nd copies of statements. Barry estimates that he will use network ATMs about 5 times a month with either bank. Barry decides in the end to choose EECU. Assuming that both banks provide the necessary services equally well, and based upon the tables of fees given above, how much can Barry reasonably expect to save annually by choosing EECU in this case over E-town bank?

B

Based on the above chart, which industry's average annual rate of change is projected to decrease the most in the 2006-2016 period as compared to its average annual rate of change during 1996-2006? a. Utilities b. Educational services c. Federal government d. State and local government

B

Choose the method of pay that would result in the most earnings for one month on sales of $73,620. a. Straight commission of 6% on all sales. b. Monthly salary of $3,000 plus 2% commission on all sales. c. Graduated commission of 4% on the first $50,000 in sales and 9% on anything over that. d. Graduated commission of 5% on the first $35,000 in sales and 7% on anything over that.

B

Christina will be retiring next month from her job after 35 years as a school bus driver. Over the last 35 years, Christina's annual salary averaged $22,040. She expects to receive some money each month from Social Security and plans to take the rest of the money she needs to pay the monthly bills from savings. Each month her bills total to about $1,375. Assuming her annual Social Security benefit will be 42% of her salary average, how much will she need to take from savings each month to help pay the bills? a. At least $771.40 b. At least $603.60 c. At least $629.71 d. At least $1,722.08

B

Earned income and capital gains (or "portfolio income") are acquired in different ways. Which statement describes how they are different? a. Earned income and capital gains are both based on the number of hours you work. b. Earned income is payment for employment, while capital gains are produced by your investments. c. Capital gains are received if you manage the company, but earned income is received if you are an employee of the company. d. Earned income is when you make the investment directly, but capital gains are when someone else has managed your investments.

B

Elisha is a photographer and charges a set fee to photograph weddings. This is an example of _____ income. a. capital gains b. earned c. hourly d. passive

B

Elizabeth has $252.00 in her account on Sunday. Over the next week, she makes the following changes to her balance via deposits and purchases: On what day does Elizabeth first get charged an overdraft fee? a. Wednesday b. Thursday c. Friday d. Saturday

B

Employee benefits ______. a. decrease total employment compensation b. increase total employment compensation c. decrease net pay d. increase net pay

B

Five years ago, William bought a twelve-room apartment complex for $340,000, and he plans to sell it today. The real estate market caused William's complex to increase in value by 1.8% every year. William charges $525 per month to rent a room, and pays $36,500 in building upkeep every year. If William has kept all of his apartments continually rented out since he bought the building, to the nearest hundred dollars, how much profit will he realize once he sells it? a. $195,500 b. $227,200 c. $226,100 d. $245,500

B

Gerald would like to add a dental and vision option to the health insurance plan he purchased through his employer. In addition to the 65% of Gerald's $345 monthly health insurance premium, his employer has offered to pay 50% of a $38 monthly dental premium and 75% of a $23 monthly vision premium. If Gerald adds both the dental and vision options to his insurance plan, how much will he pay each month towards health insurance?

B

Giselle wants to buy a condo that has a purchase price of $163,000. Giselle earns $2,986 a month and wants to spend no more than 25% of her income on her mortgage payment. She has saved up $33,000 for a down payment. Giselle is considering the following loan option: 20% down, 30 year at a fixed rate of 6.25%. What modification can be made to this loan to make it a viable option, given Giselle's situation? a. Change to a 15 year fixed loan b. Change the interest to 5.5% c. Change the down payment to 18% down d. None. This is a viable option for Giselle

B

Give an example of when an actual net income would result in a negative number. a. When the budgeted expenses exceed the actual expenses, the result is a negative actual net income. b. When the actual expenses exceed the actual income, the result would be a negative dollar amount. c. When the budgeted income is less than the actual income, the result is a negative actual net income. d. When the actual expenses are less than the actual income, the result is a negative dollar amount.

B

Glenda bought a new car with monthly payments of $357. Glenda manages to make her monthly car payments each month, but fails to perform the routine maintenance, like regular oil changes, because of the cost. To ensure that regular maintenance on her car can get done, which part of her financial plan should Glenda work on? a. financing b. income c. investing d. saving

B

Greg and Josh want to go whitewater rafting in 3 weeks. Josh is able to save the $480 he needs to go on the trip by saving the pay he received for 5 hours of work each week. Greg must save 8 hours worth of pay each week in order to have enough money. How much more money does Josh make than Greg? a. $10 b. $12 c. $14 d. $20

B

Greg invests $2,680 in a CD paying 7.0% interest, and $3,060 in an online savings account paying 4.5% interest. How much more interest will the CD have earned than the savings account after 1 year? a. $25.90 b. $49.90 c. $380.00 d. $499.00

B

How can simple interest make saving money easier? a. Because it is simple, you have to do fewer calculations than if you saved money without it. b. Simple interest allows your money to earn money, so you have to save less. c. You are more motivated to reach goals that you are interested in, so you are less likely to abandon your savings plan. d. A bank with a simple interest savings plan will automatically transfer money from your paycheck to your savings account, letting you save without any extra effort.

B

How much more interest is earned on an investment of $12,585 at 3.5% interest over 5 years if the interest is compounded annually rather than earning simple interest? a. They are the same. b. $159.65 c. $2,362.03 d. $12,744.65

B

If the NCUA pays $1.92 billion to cover several failed credit unions, and doing so drains its reserve fund by 8.42%, approximately how much was in the fund to begin with? a. $24.7 billion b. $22.8 billion c. $20.9 billion d. $19.0 billion

B

In the formula I=P·r·t, what does P stand for? a. Percent: the interest rate expressed as a percentage b. Principal: the amount of money you initially invested c. Period: how often the interest is calculated d. Payout: how much money you end up with

B

In which of the following stores would you pay the least amount for an item that is priced $360? Store A: Sale of 10% off and a successive discount of 10% off. Store B: Sale of 15% with no additional discount. Store C: Sale of $35 off and a successive discount of 10% off. a. All of the stores have the same discounted price. b. You can get the lowest price at Store A. c. You can get the lowest price at StoreB. d. You can get the lowest price at Store C.

B

Jack is considering a list of features and fees for Current Bank: Jack plans on using network ATMs about 4 times per month. What would be Jack's total estimated annual fees for a checking account with direct paycheck deposit, one overdraft per year, and no 2nd copies of statements? a. $44 b. $104 c. $144 d. $176

B

Jackie's broker charges her a commission of $8 per ten shares of stock she buys or sells. If Jackie buys 77 shares of Alesia Insurance at $10.34 per share and 120 shares of Ergar Appliances at $8.11 per share, how much will Jackie spend in commission? a. $796.18 b. $157.60 c. $973.20 d. $1,926.98

B

Jade wants to buy a $200,000 term life insurance policy. She is 34 years old. Using the premium table, what is her annual premium for a 10 year policy?

B

Jim and Stephanie just got married and are thinking about changing their health care insurance plans to be more affordable. Currently, both Jim and Stephanie are insured through their own employers. Jim's employer pays 42% of his $378 monthly premium. His insurance plan will also pay for 23% of the $345 premium for additional beneficiaries. Stephanie's employer pays 35% of her $298 monthly premium but offers to pay an extra 10% of her premium for each beneficiary Stephanie adds to her plan. Her employer would then pay 30% of the $349 premium for each additional beneficiary.

B

Julien was involved in an accident in which he merged into another car, damaging the front fender of the other car. Julien is fully insured through his insurance company. Which component of Julien's insurance plan will cover the damage he caused to the other car? a. bodily injury b. property damage c. collision d. comprehensive damage

B

Karina bought a townhouse for $199,900. She has a 30 year mortgage with a fixed rate of 5.5%. Karina's monthly payments are $998.08. What percent of the purchase price was Karina's down payment? a. 7% b. 12% c. 15% d. 18%

B

Leo is 23 years old and works for a company that matches his 401(k) contribution up to 4.6%. The interest rate for his 401(k) is 5.32%. If he puts away 8% of his $65,000 salary every year, how much would he have saved in 10 years? Round your answer to the nearest cent. a. $7110,127.51 b. $104,564.67 c. $65,582.40 d. $62,269.66

B

Liz owns stock in Nar Heating/Cooling and Cilla Shipping. She owns 120 more shares of Cilla Shipping than she does of Nar Heating/Cooling. Nar Heating/Cooling pays a yearly dividend of $5.78 per share, and Cilla Shipping pays a yearly dividend of $4.15 per share. If Liz receives $1630.02 in dividends annually, how many shares of Nar Heating/Cooling does she own? a. 196 shares b. 114 shares c. 348 shares d. 282 shares

B

Marco leaves the bathroom faucet running for 22 minutes while he gets ready in the morning. Running the faucet for 5 minutes wastes the same amount of energy as leaving a 60-watt light bulb on for 14 hours. How much energy did Marco waste, in terms of hours which a 60-watt light bulb would remain on? a. 7.9 hours b. 61.6 hours c. 56.0 hours d. 264.0 hours

B

Maria, age 28, wants to pay no more than $300 a year in life insurance. What is the face value of the largest 20-year term policy she can buy without spending more than $300 annually?

B

Mary and Lewis each open a savings account at the same time. Mary invests $3,700 in an account yielding 3.2% simple interest, and Lewis invests $3,000 in an account yielding 5.9% simple interest. After fifteen years, who has the greater total amount of money, and how much greater is it? a. Lewis has $879 more than Mary. b. Lewis has $179 more than Mary. c. Mary has $776 more than Lewis. d. Mary has $345 more than Lewis.

B

Michael needs to pay car insurance premiums of $958 two times per year. He has decided to make deposits from each paycheck to a savings account for "Other Expenses (Predictable)" to cover this expense. How much should Michael deposit from each paycheck if the paycheck is bi-weekly? a. $80 b. $74 c. $160 d. $37

B

Money is invested into an account earning 4.25% interest compounded annually. If the accumulated value after 18 years will be $25,000, approximately how much money is presently in the account? a. $5,875 b. $11,820 c. $19,125 d. $23,960

B

Muriel has kept track of her income and expenses for the week in the spreadsheet below. How much was Muriel's restaurant bill?

B

Natalie charges $1,490 per month to rent each of her three rental houses. Natalie must pay $5,850 in maintenance costs per house per year. If all three houses are occupied, how much money will Natalie earn over seven years? a. $334,250 b. $252,630 c. $84,210 d. $375,480

B

Noah has just purchased a previously owned home. He put $5,000 towards a down payment and took out a $65,000 mortgage. Noah knows that his older home will need maintenance right away and wants to budget enough for this coming year for unexpected expenses. When estimating costs for home repair and maintenance, a good estimate is to budget 1% of the purchase price of a house. What would be a good yearly estimate of repairs and maintenance for Noah's home? a. $1550 b. $700 c. $650 d. $150

B

On his road trip, Leon stops to refuel and get some snacks. He has the following purchases: 12 gallons of gas at $2.89 per gallon 2 granola bars for $1.59 each 1 apple for $0.89 2 bottles of vitamin water for $1.39 each Leon must pay 7.5% sales tax on everything but the gas, which already has tax included in the per gallon price. If Leon paid $44.64, then he _____ for his purchase. a. did not pay enough b. paid the correct amount c. paid $2.60 too much d. paid $3.11 too much

B

One possible solution to a diminishing Social Security payroll is to decrease the Social Security benefit by 13%. How would such a decrease effect the benefits on a salary of $54,000? a. Benefit would decrease by $1,404 annually. b. Benefit would decrease by $7,020 annually. c. Benefit would decrease by $8,640 annually. d. Benefit would decrease by $15,660 annually.

B

Pete earns graduated commission on his sales each month. He earns 7% commission on the first $35,000 in sales and 9% on anything over that. If Pete had $43,000 in sales this month, how much commission did he earn? a. $2,610 b. $3,170 c. $3,870 d. $6,880

B

Peter wants to buy a duplex with a purchase price of $226,950. Peter can afford a 10% down payment. Peter earns $2,985 a month and wants to spend no more than 10% of his income on his mortgage payment. Peter is going to rent out the other half of the duplex. He thinks that if he charges $900 a month in rent this will cover the remainder of his mortgage payment. Given that Peter has a 30 year mortgage with a fixed rate of 6.25%, how should Peter adjust how much he charges for rent of the other half of the duplex? a. Peter should increase the rent by $200. b. Peter should increase the rent by $60. c. Peter should increase the rent by $10. d. Peter should keep the rent at $900.

B

Sally's employer pays for 38% of her annual health insurance premium of $4,350.00. Sally pays the remaining balance by having it deducted in equal amounts from her 26 paychecks throughout the calendar year. How much will Sally have deducted from each paycheck? a. $63.58 b. $103.73 c. $137.75 d. $207.46

B

Sammy makes monthly deposits from each paycheck into the various accounts, and then spends from those accounts only for their defined purposes. He knows that it is not a perfect system, but thinks that it will help to assure coverage for future expenses. Using his essential expenses as a guideline, how much will Sammy need to save if he wants to have 3 times the amount of his living expenses in the bank as part of his emergency savings. How long will it take him to achieve his goal? a. $1,712; approximately 8 months b. $5,136; approximately 24 months c. $6,486; approximately 30 months d. $2,162; approximately 6 months

B

Say a certain manufacturing industry has 63.1 thousand jobs in 2008, but is expected to decline at an average annual rate of 1.7 thousand jobs per year from 2008 to 2018. Assuming this holds true, what will be this industry's percent change from 2008 to 2018? a. 70% b. -27% c. -17% d. -75%

B

Select the correct statement and rationale relating the interest rates of online banks to those of traditional banks. a. Online banks offer greater interest rates than traditional banks because they are more risky, b. Online banks offer greater interest rates than traditional banks because they have lower overhead costs. c. Online banks offer lower interest rates than traditional banks because they have not had enough time to establish themselves. d. Online banks offer lower interest rates than traditional banks because that is the cost of convenience.

B

Shaniqua brings home $225 per week working 25 hours. She is able to save $25 of her earnings each week. Shaniqua wants to have $600 saved at the end of 15 weeks. She is allowed to work up to 30 hours per week if she wants. She can save all the money earned working extra hours. Which of the following statements is true? a. Shaniqua will meet her goal working 25 hours per week. b. Shaniqua must work 27 hours per week to meet her goal. c. Shaniqua must work 30 hours per week to meet her goal. d. Shaniqua will not be able to reach her goal.

B

Social Security and Personal Income tax are called Payroll taxes because _____. a. they help to balance the national payroll budget. b. they are automatically deducted from payroll. c. once paid, they are used to supplement the paychecks of people in need. d. you need to prove you have paid them before you can pick up your paycheck.

B

Tamara earns $8 an hour at her job working 25 hours per week. If 22% of her paycheck goes to taxes, what is Tamara's monthly cash inflow? (Assume this is her only source of income and that there are 4 pays per month.) a. $176 b. $624 c. $778 d. $800

B

Tamara earns her living as a salary plus commission employee. Her annual salary is $48,000, and she earns 4% commission on all sales she makes. If Tamara wants to make a total of $6,000 this month, how much in sales does she need to have? a. $30,000 b. $50,000 c. $100,000 d. $150,000

B

Tax returns filed manually have a 20% chance of containing errors, while tax returns filed electronically have a 0.05% chance of containing the same. If 2.7 million tax returns are filed each way, how many more erroneous manually filed returns will there be than erroneous electronically filed returns? a. 270,675 b. 538,650 c. 541,350 d. 269,325

B

The Johnsons are buying a house that costs $210,000 and can afford a 20% down payment. If the Johnsons want the lowest monthly payment, which loan option would you recommend? a. 30 year FHA, 3.5% down at a fixed rate of 6.25% b. 30 year fixed, 20% down at a fixed rate of 6% c. 30 year fixed, 10% down at a fixed rate of 6% d. 15 year fixed, 20% down at a fixed rate 5.5%

B

The Picketts have lived in their house for about 13 years. They like to keep a well-maintained property and have noticed that the paint on the exterior of their house is starting to peel. They get two bids for painting services from two different contractors. Based on the fee schedule below, which option would be the cheapest and by how much? Handyman's Paint Service Painting Plus Service $2250 all supplies and labor included for a 2-day job Two day job estimate $300 preparation work $765 labor per day $225 paint and supplies a. Painting Plus Service would be cheaper by $960 b. Painting Plus Service would be cheaper by $195 c. Handyman's Paint Service would be cheaper by $105 d. Handyman's Paint Service would be cheaper by $195

B

The average hourly earnings for a construction worker is projected to be $24.50 in 2012. Jason wants to join the construction work force after he graduates in 2012. His friend tells him that average hourly earnings for construction workers will rise by 2% from 2009 to 2012. Based on the data below, assuming that the projected hourly earnings are correct, is Jason's friend's statement accurate?

B

The following closing costs were paid on a home loan. If the closing costs were 5% of the loan amount, how much was the loan amount? a. $62,580 b. $70,880 c. $74,424 d. $177,200

B

The following list shows the items and prices for a restaurant order. Calculate the total amount if there is a 7% tax and the customer leaves a 20% gratuity. 1 appetizer: $7.39 2 entrees: $16.99 each 1 dessert: $5.29 2 drinks: $2.30 each a. $65.82 b. $65.10 c. $54.85 d. $40.60

B

A lender estimates the closing costs on a home loan will be 3% of the loan amount of $180,000. The actual closing costs are listed below. Evaluate the lender's good faith estimate. a. The lender made an excellent estimate; it was equal to the actual closing costs. b. The lender made a very good estimate; it was within 0.25% of the actual closing costs. c. The lender made a fairly good estimate; it was between 0.25% and 0.5% of the actual closing costs. d. The lender made a poor estimate; it was higher than 0.5% of the actual closing costs.

A

A toaster oven costing $130 offers an extended warranty for 25% of the purchase price. If the local repair shop will fix a toaster oven for $8, how many times must the toaster oven break in order for the warranty to pay for itself? a. five b. six c. four d. one

A

Aaron is a high school graduate working as a retail clerk. He earns a median salary for a high school graduate. Aaron is thinking about going to college to get an associate's degree. If he completes his degree in 2 years and college costs total $30,000, how long will it take Aaron to recover his investment, assuming that he earns the median salary and continues to work full time while he is attending school?

A

According to the chart below, what percentage of Ralph's expenses are items other than taxes? a. 65% b. 71% c. 75% d. 94%

A

Alberto is making a budget. He owes a cell phone bill of $60 per month for 23 more months, plus the fees for any extra usage such as text messaging or extra minutes. Which of the following is the correct category for this expense? a. Essential (flexible) expense b. Emergency fund c. Essential (fixed) expense d. Non-essential expense

A

An account paying 4.6% interest compounded quarterly has a balance of $506,732.32. Determine the amount that can be withdrawn quarterly from the account for 20 years, assuming ordinary annuity. a. $9,722.36 b. $6,334.15 c. $23,965.92 d. $7,366.99

A

An employee makes an hourly rate plus any tips they earn. This tip employee made a total of $400 by working 28 hours last week. If $253 of their total earnings was their tips, what is their hourly rate of pay? a. $5.25 b. $5.61 c. $8.82 d. $9.04

A

An investment of $6,599.20 earns 4.2% interest compounded monthly over 7 years. Approximately how much interest is earned on the investment? a. $2,250.96 b. $4,308.21 c. $6,762.59 d. $8,850.20

A

An investment of $7,650 earns interest at the rate of 5% and is compounded quarterly. What is the accumulated value of the investment at the end of 9 years? a. $11,964.17 b. $11,867.66 c. $9,338.56 d. $8,554.94

A

The health care Jimmy's employer offers is a fee-for-service plan in which Jimmy and his family must pay for $12,500 in health related services in a calendar year before the insurance company begins to pay. Jimmy and his family have several health related issues that demand $685.00 each month. If one of Jimmy's children were to become seriously injured at the end of the year, how much would the related health costs need to be in order for the insurance company to assume responsibility? a. $984.58 b. $4,280.00 c. $11,815.00 d. $14,417.92

B

Andrea is shopping for items for her pet sitting business because the store is having a sale where everything in the store is 5% off. Andrea buys a cat carrier for $39.99 and a cat tower for $19.99. She has a coupon for an additional 15% off on the cat tower. Before tax, Andrea estimates that her total, after discounts, will be about $54. Determine if Andrea has estimated correctly. a. Yes. Andrea has estimated correctly. b. No. Andrea has taken 20% of the total, which is not correct.. c. No. Andrea has taken successive discounts on the total, but the coupon is just on the cat tower. d. No. Andrea has only taken the 5% discount on the cat tower and not on the carrier.

A

The music store is having a 15% off sale on all classical music cds. Lyell has a coupon for 20% off any classical music cd. How much will Lyell save on a classical music cd that has a price of $23.99? a. $7.20 b. $7.68 c. $8.40 d. $9.60

B

The projected number of employed writers and authors in 2016 is 153,000. 12.4% of those will have some college experience but no degree, and 84.1% will have a bachelor's degree or higher. If this holds true, how many more writers and authors with bachelor's degree will there be than those with only some college experience and no degree? a. 147,645 b. 109,701 c. 134,028 d. 128,673

B

Ben just purchased a house in an older neighborhood. After talking to several neighbors across the street, he found that he is paying much more in homeowners insurance than other homeowners in the neighborhood. Ben's house is about 30 years old. It is made of wood framing and stucco texture. It has all of it's original plumbing and electrical work. The brick wall at the back of his back yard separates his yard from a drainage wash. Which of the following is not a reasonable argument for the insurance company to use to justify Ben's higher homeowners insurance premium? a. The age and outdated structural design of the house implies that remodeling is likely. This warrants a higher premium. b. Knowing that old plumbing has a tendency to break, there is a real possibility of internal flooding. This warrants a higher premium. c. Since Ben is right next to a drainage wash, there is a certain danger of flood damage should the wash overflow. This warrants a higher premium. d. Considering that the house is made of flammable materials and has the original wiring, there is a certain danger of fire. This warrants a higher premium.

A

The table below shows the typical hours worked by employees at a company. A salaried employee makes $50,000 per year. Hourly employees get paid $20 per hour, but get $30 per hour for each hour over 40 hours. Sun. Mon. Tues. Wed. Thurs. Fri. Sat. 0 8 8 9 9.5 7.5 4 Which of the payment options would you recommend to a new employee? a. Either one. Hourly and salaried employees earn the same amount per week. b. Hourly pay. Hourly employees make more per week than salaried employees. c. Salaried pay. Salaried employees make more per week than hourly employees. d. There is not enough information given to compare weekly earnings.

B

The total employment for police officers in 2006 was 648,000. If there are 719,000 police officers in 2016, what will the percent increase have been? a. 5.12% b. 10.96% c. 11.09% d. 22.07%

B

Tristan has found a good job as a bookkeeping clerk after finishing his associates degree at the local community college. He is making a beginning annual salary of $19,760. How can this increased income affect his financial decisions? Compare his previous budget when he worked part time while finishing his degree with his current budget after getting a full time job. a. Tristan is spending too much money on groceries and entertainment. b. Tristan is earning quite a bit more in his full time job. He is spending more on rent, utilities, food, and entertainment, as well as saving $350 each month. c. Tristan is earning double his previous wages. He should double his expenses, as well. d. Tristan's increased income should have no effect on his financial decisions.

B

Bill wants to open a checking account to pay bills from and a savings account to cover overdrafts and other emergencies. He wants online services, and a debit card. He analyzes the following statements of fees from State Bank and Common Bank: Based upon past experience, Bill expects to accidentally overdraft the account 2 times per year, unfortunately, due to unexpected charges and miscommunications. He expects no 2nd copies of statements, and to use network ATMs 4 times per month with State Bank (due to less in-network ATMs being available), or 2 times per month with Common Bank. He has $2500 to deposit to an emergency savings account for overdraft protection, and thinks that the balance will be enough to cover most all overdrafts in the future if automatic transfers are made when needed. Based on the tables of fees, which bank is expected to cost the least amount in fees per year? a. State Bank is expected to cost the least. b. Common Bank is expected to cost the least. c. State Bank and Common Bank would have the same costs for Bill. d. The fees cannot be estimated in advance.

A

Use the conversion that 1 ounce is approximately 28.35 grams to calculate the unit price per ounce for 283.5 grams at $5.48. a. $0.06 b. $0.55 c. $5.48 d. $54.80

B

Brendon had total job benefits of $39,500 last year. He was required to wear a shirt with the company logo on it for work that he was responsible for buying. Brendon purchased 12 shirts for work during the year at a cost of $23.95 each. He was also required to attend a training at a cost to him of $135. What was Brendon's total employment compensation last year? a. $39,077.60 b. $39,212.60 c. $39,341.05 d. $39,922.40

A

Brian is calculating his tax deductions. He finds that he can deduct $1,225 as a result of money given to charity, $4,391 from interest paid on his mortgage, and $2,821 from what he paid in state and local taxes. What is Brian's total deduction? a. $8,437 b. $8,383 c. $6,414 d. $5,700

A

Using the standard 28/36 guidelines, if the maximum monthly mortgage payment allowed for someone applying for a home loan is $1,085, what is their annual income? a. $36,167 b. $46,500 c. $65,100 d. $162,750

B

Budgeting for home maintenance early can save money in the long run. Why save early compared to later, especially if the home is new? a. Home maintenance is unpredictable, but it is important to do it promptly, or it will result in home damage that requires repair. b. Homebuilders are often untrustworthy and do low quality work, requiring home owners to fix or finish a lot of things on their own. c. Homeowners often run into problems soon after purchasing a brand new house. d. Homeowners always have a lot of money after moving into a house they purchased, so they save it for the future.

A

Byron is a wealthy tycoon who makes his money buying and selling stocks. This is an example of _____ income. a. capital gains b. earned c. hourly d. passive

A

Cheryl wants to purchase a par value $500 bond from Agram Imports. Agram Imports bonds have a market rate of 102.114 and offer 8.1% interest. If Cheryl's broker charges a commission of 2.5% of the market value of each bond sold, what is the current yield on Cheryl's bond? a. 0.077 b. 0.078 c. 0.081 d. 0.040

A

Choose the method of pay that would result in the most earnings for one month on sales of $40,000. a. Straight commission of 7.5% on all sales. b. Monthly salary of $1,600 plus 2.5% commission on all sales. c. Graduated commission of 5% on the first $30,000 in sales and 6% on anything over that. d. Graduated commission of 4% on the first $25,000 in sales and 8% on anything over that.

A

Corporate bonds from Dagofi Radar are selling at 88.354, bonds from Chambers Translation are selling at 112.894, and bonds from Essentia Inc. are selling at 96.262. If Roger wants to buy two bonds with a par value of $1,000 each from Dagofi Radar, five bonds with a par value of $500 each from Chambers Translation, and four bonds with a par value of $1,000 each from Essentia Inc., how much can he expect to spend? a. $8,439.91 b. $8,500.00 c. $2,975.10 d. $9,343.97

A

Corporate bonds from Hyren Airlines are selling at 106.133, bonds from Xyx Motors are selling at 97.701, and bonds from Ergar Appliances are selling at 101.294. If all of the bonds mentioned have a par value of $1,000 apiece, how much will it cost George to purchase one from each corporation? a. $3,051.28 b. $3,000.00 c. $3,305.12 d. $2,694.88

A

Damian wants to save $7200 to buy a car within the next 2 years. How could a monthly budget be created to help Damian save enough money to buy a car in a timely manner with minimal effect on his other essential expenses?

A

Darius wants to purchase his favorite salad dressing. The salad dressing comes in two different size bottles. The 16 ounce bottle is on sale for $3.36. The 10 ounce bottle is priced at $2.30. Darius has a coupon for 40 cents off if you buy two 10 ounce bottles. Determine if Darius gets the better buy when he buys one 16 ounce bottle or when he buys two 10 ounce bottles. a. Darius will get the same deal on either purchase. b. Darius will get the better deal buying one 16 ounce bottle. c. Darius will get the better deal buying two 10 ounce bottles. d. Darius doesn't need the coupon, he will get the best deal on one 10 ounce bottle.

A

Using this information, consider the three following real estate investment strategies, and rank them from least to greatest according to how much profit they would likely make in this market, assuming that each of them purchased a house in this area at year 0. I. A house flipper, seeking to sell the house as soon as doing so becomes profitable, sells after 4 years. II. A long-term investor, seeking to hold onto the house for a long time, sells after 23 years. III. A moderate-term investor who will sell the house once it reaches a certain price, sells after 11 years. a. I, II, III b. II, I, III c. III, I, II d. Each of them will make roughly as much profit as the others.

B

Davi is mapping out essential and non-essential expenses and is perplexed about where to categorize gift-giving. Davi considers splitting gifts into 4 different spending categories (Essential—Fixed, Essential—Variable, Non-Essential, and Other—Predictable). Then, he decides that 4 categories would be too complicated. He thinks that it will be simpler to budget all gifts under one category only and decides on the category "Other (Predictable)". In addition, he will open a special savings account only for gift expenses, both for known people and occasions, and for general gifts that he may decide to give in the future. Which statement below is not a reasonable reason for Davi's decision to establish a separate account for gift expenses. a. Budgeting categories are exact, and gifts can fit into only one of them. b. He will be able to give both planned and unplanned gifts that he has budgeted for. c. He will still be able to cover other important living expenses. d. Simplifying will help assure that he can follow his budget plans.

A

Determine the amount needed such that when it comes time for retirement, an individual can make monthly withdraws in the amount of $2,154 for 30 years from an account paying 5.1% compounded monthly. Round your answer to the nearest cent. a. $396,721.78 b. $398,407.85 c. $775,440 d. $1,833,962.40

A

Emma is ready to open a new checking account and is trying to decide between three banks using the chart below: Emma usually has about $1000 in her account at any given time during the month. She usually visits the ATM twice a week and is interested in banking online options. Bank R has 10 ATMs within a 5 mile radius of Emma's home. Bank S has 1 ATM 10 miles from Emma's work. Which bank should she choose? a. Bank R b. Bank S c. Bank T d. Bank R and S

A

Enzel goes online to buy a graphing calculator. He finds a site that currently has a promotion of 15% off on all orders over $50. Enzel decides to buy his graphing calculator, with a price tag of $83, at this site because he knows that he will get the 15% discount when he checks out. Enzel pays 4.5% sales tax on the discounted price and pays a shipping fee of $6.35. What is the total of Enzel's online purchase? a. $80.07 b. $80.36 c. $86.74 d. $93.09

A

Ethan is planning for his retirement. He has narrowed it down to two investment options. The first is an IRA where monthly payments are made, in the amount of $416.66, for 30 years. The second is a Roth IRA where annual payments are made, in the amount of $5000, for 30 years. If both compound interest at a rate of 2.5%, determine which account will yield the largest future value for Ethan, and how much greater that value will be than that of the other account. Round your final answer to the nearest cent. a. IRA; $3,552.72 b. Roth IRA; $3,552.72 c. IRA; $1,470.39 d. Roth IRA; $1,470.39

A

For each of the following wages, determine the Medicare tax that would be withheld. i. $23,660 ii. $89,000 iii. $166,090 a. i. $343.07 ii. $1,290.50 iii. $2,408.31 b. i. $3,430.70 ii. $12,905.00 iii. $24,083.05 c. i. $146.70 ii. $551.80 iii. $1,029.76 d. i. $1,466.92 ii. $5,518.00 iii. $10,297.58

A

A couple is required by their lender to have a down payment of 20% of the purchase price of the home they want to buy. If the couple has saved $35,000, what is the most expensive home the couple can afford to buy? a. $63,000 b. $140,000 c. $175,000 d. $210,000

C

A family eats out at a restaurant and the total for their meals is $73.89. They also pay sales tax of 5.8% and leave a tip for their server. If the family leaves a total of $93, which of the following might be a description of the service they received? a. They left a 10% tip, so the service was probably below average. b. They left a 15% tip, so the service was probably average. c. They left a 20% tip, so the service was probably above average. d. They left a 25% tip, so the service was probably outstanding.

C

A lawnmower costs $284, and the six-year extended warranty on the lawnmower costs 17% as much as the lawnmower itself. What is the effective price per year of the extended warranty? a. $4.82 b. $3.93 c. $8.05 d. $7.03

C

A lender estimates that the closing costs on a $165,000 home loan will be $6,187.50. The actual closing costs were 3.5% of the loan amount. Determine if the closing costs were higher or lower than the estimate and by what percent? a. higher by 0.25% b. higher by 0.5% c. lower by 0.25% d. lower by 0.5%

C

A lender estimates the closing costs on a home loan of $50,000 as listed below. If the lender's good faith estimates are accurate, are they a reasonable amount for closing costs? Why or why not? a. Yes, because the lender esitmated 3.08% of the home loan in closing costs which falls between 3 - 5%. b. Yes, because the lender estimated 4.6% of the home loan in closing costs which does not fall between 3 - 5%. c. No, because the lender estimated 6.2% of the home loan in closing costs which does not fall between 3 - 5%. d. No, because the lender estimated 17.7% of the home loan in closing costs which does fall between 3 - 5%.

C

Anna has $274.00 in her account on Sunday. Over the next week, she makes the following changes to her balance via deposits and purchases: Anna gets an overdraft fee if her balance at the end of the day is negative. On which day or days does Anna get charged an overdraft fee? I. Wednesday II. Thursday III. Friday a. I only b. I and II c. II and III d. III only

C

Aria paid $75,000 for her house. Its property value increased by 2.2% per year. When Aria sold her house after eleven years, how much was it worth, to the nearest hundred dollars? a. $133,700 b. $95,400 c. $95,300 d. $93,100

C

Barry gets hurt at work and must go on disabililty for 4 months. On disability, the pay that Barry receives is 60% of his normal net pay. Barry should be fine if he has a plan for _____. a. financing b. managing his income c. managing his liquidity d. protecting his assets

C

Based on trends displayed in the graphs above, which answer choice represents a likely situation for 2010? a. There will be more than 6.5 million construction employees in 2010, and those employees will have average hourly earnings of $24.00. b. There will be over 6 million construction employees in 2010, and the average hourly earnings will be less than twenty dollars. c. There will be roughly 6 million employees in 2010, and those employees will have average hourly earnings of $22.75. d. There will be over 7.5 million employees in 2010, and those employees will earn, on average, $23.00 per hour.

C

Bianca and Dave are a married couple filing a joint tax return. They have a combined gross income of $81,031 and claim four exemptions. They can make an adjustment of $2,914 for business expenses, an adjustment of $1,939 for business losses, a deduction of $4,140 for medical expenses, an adjustment of $4,825 for contributions to their retirement fund, and a deduction of $2,420 for charitable donations. If exemptions are worth $3,650 apiece and the standard deduction for a joint return is $8,350, what is their total taxable income? a. $50,193 b. $41,843 c. $48,403 d. $52,793

C

Bob's employer covers 23% of his family's annual health insurance premium. The balance of the premium is deducted in equal amounts from Bob's paycheck 26 times over the calendar year. If $185.30 is withheld from each of Bob's paychecks, what is his family's annual health insurance premium? a. $805.65 b. $4,817.80 c. $6,256.88 d. $20,946.96

C

Bonds from the city of Tavel Gorge worth $1,000 each are selling at 110.611. If Sean wishes to purchase three such bonds, how much can he expect to pay? a. $3,000.00 b. $3,331.83 c. $3,318.33 d. $331.83

C

Brenda has an associate's degree earning the median salary. She wants to quit working and go to college to get just a basic bachelor's degree. If she completes her degree in 2 years and it costs $15,000, how long will it take her to recover her investment assuming that she earns the median salary?

C

Brenda has money invested in Esti Transport. She owns two par value $1,000 bonds issued by Esti Transport, which currently sells bonds at a market rate of 101.345. She also owns 116 shares of Esti Transport stock, currently selling for $15.22 per share. If, when Brenda made her initial investments, Esti Transport bonds had a market rate of 96.562 and Esti Transport stock had a share price of $13.40, which side of Brenda's investment has gained a greater percent return, and how much greater is it? a. The bonds showed a return that was 4.78 percentage points higher than that of the stocks. b. The bonds showed a return that was 4.95 percentage points higher than that of the stocks. c. The stocks showed a return that was 8.63 percentage points higher than that of the bonds. d. The stocks showed a return that was 3.58 percentage points higher than that of the bonds.

C

Calculate 7.25% tax on $1,540. a. $11.17 b. $109.34 c. $111.65 d. $113.96

C

Catherine bought 355 shares of Trochel Office Supplies at $31.29 per share. Several months later, the price went up and she sold them at $49.88 per share. How much profit did Catherine make? a. $28,815.35 b. $17,707.40 c. $6,599.45 d. $11,107.95

C

Choose the circumstances in which a debit card can be used. I. Point-of-sales transactions II. ATM withdrawals a. I only b. II only c. I and II d. Neither I, nor II

C

Cindy's apartment complex is offering renters insurance through their insurance company. The insurance company charges an annual premium of $565.00 which can be paid in equal payments throughout the year with her monthly rent. Cindy's monthly rent is currently $789.00. What will Cindy's new rent be if she includes the renters insurance? a. $47.08 b. $630.75 c. $836.08 d. $1,354.00

C

Claire purchases a new dress for the prom. The dress is priced $160, but it is on sale for 30% off. Claire's aunt works at the store and can give her an additional 10% off. If the sales tax is 7.5%, how much does Claire pay for the dress? a. $93.24 b. $103.20 c. $108.36 d. $120.40

C

Clovis wants to make a surprise visit to his uncle who lives out of town. He purchases an airline ticket for $69. There is a 15% sales tax on the price of the airline ticket. In addition he must pay a baggage fee of $20. When he arrives at the airport, Clovis takes a taxi to his uncle's house which is 8 miles from the airport. The taxi fee is $2.50 per mile. If Clovis has spent a total of $123.35 for the airline ticket and taxi, at what percent of his fare did Clovis tip the taxi driver? a. 10% b. 15% c. 20% d. 25%

C

Curtis just recieved a raise at work increasing his salary by $8,500. He knows that an increase in salary will increase the amount of federal income taxes withheld from his paycheck. Which of the following statement best describes the effect his raise will have on state income tax withholdings? a. State income tax is unrelated to federal, he will see no change in his state withholding. b. Since he is having more withheld for federal, he will have less withheld for state so that he pays the same amount in the end. c. State income tax is usually a set percentage of federal income tax. With an increase in federal he will see an increase in state withholding. d. Since he is making more money, the state government will take advantage of his raise and charge him more income tax. His state withholding will increase.

C

DeShawn is 38 years old and is married with 3 children, ages 2, 4, and 6. He makes $45,000 a year and is planning to retire when he turns 60. From the following three options, DeShawn decides to buy the $900,000 20 year term policy. Given DeShawn's scenario, assess whether DeShawn made a wise decision.

C

Drake wants to save $750 so that he can take a class on computer analysis for cars. The class is being held on various dates over the next several months. Drake is planning to take the class 6 weeks from now, so he plans to save $125 each week. Unfortunately, Drake had to take out a little money from his savings in the 3rd week. After 4 weeks, Drake has $470. He knows that he must adjust his plan in order to meet his goal. Drake came up with the following options: Option A: Stay with saving the original amount each week but take the class a week later than originally planned. Option B: Increase the amount of money he saves each week by $15 from his original plan. Which of the following is a true statement? a. Only option A will allow him to meet his goal. b. Only option B will allow him to meet his goal. c. Both options A and B will allow him to meet his goal. d. Neither option A nor option B will allow him to meet his goal.

C

Four years ago, Sam invested in Grath Oil. She bought three of its $1,000 par value bonds at a market price of 93.938 and with an annual coupon rate of 6.5%. She also bought 450 shares of Grath Oil stock at $44.11, which has paid an annual dividend of $3.10 for each of the last ten years. Today, Grath Oil bonds have a market rate of 98.866 and Grath Oil stock sells for $45.55 per share. Use the scenario above to consider which statement best describes the relative risk between investing in stocks and bonds. a. It is equally likely that the company would suspend paying interest on the bonds and dividends on the stock. b. Both the coupon rate and the dividend rate are fixed and cannot change. c. The market price of the bonds is more stable than the price of the company's stock. d. The amount of money received annually in interest (on the bonds) and in dividends (on the stocks) depends on the current market prices.

C

Gina invests $1,677 in an account paying 8.61% simple interest annually. How much interest has Gina gained after six years? a. $668.65 b. $240.65 c. $866.34 d. $2,543.34

C

Given the following information, choose the brand that is the better buy. Brand A: $2.16 for 18 ounces Brand B: $1.50 for 12 ounces Brand C: $2.26 for 20 ounces Brand D: $1.95 for 16 ounces a. Brand A b. Brand B c. Brand C d. Brand D

C

Glenda makes an online purchase of 4 picture frames for $12.95 each and 4 mats for $5.89 each. The site says that taxes paid by the customer are 6.5% of the total purchase price. Shipping charges are based on the following table: Glenda selects express shipping for her purchase and the company bills her credit card $91.86 for the total of the online purchase. Determine if Glenda has been billed correctly for her purchase. a. Glenda has been billed correctly. b. Glenda has not been charged enough for her purchase. c. Glenda has been over charged by $3.40 for her purchase. d. Glenda has been over charged by $3.80 for her purchase.

C

How does the average monthly utility bill of Orlando, FL compare with the average monthly utility bill of Indianapolis, IN? a. The average monthly utility bill for Indianapolis, IN is $88.72 more than Orlando, FL. b. The average monthly utility bill for Indianapolis, IN is $85.33 more than Orlando, FL. c. The average monthly utility bill for Orlando, FL is $85.33 more than Indianapolis, IN. d. The average monthly utility bill for Orlando, FL is $88.72 more than Indianapolis, IN.

C

How is a debit card similar to an ATM card? a. Each is only available to adults 18 and older. b. Any one person can only have one of each at a time. c. Both can be used to withdraw money from ATMs. d. Both can be used to make purchases online.

C

How is email a useful component of online banking? I. Email alerts can be used to warn you before you overdraw your account. II. You can have your bank statements emailed to you, getting them to you faster. III. Only emailed bank statements can be used to support electronically-filed tax returns. a. I only b. II only c. I and II only d. I, II, and III

C

How much money would need to be deposited into an account earning 5.75% interest compounded annually in order for the accumulated value at the end of 25 years to be $85,000? a. $75,425.52 b. $59,130.43 c. $21,009.20 d. $20,258.70

C

If 20% of all manually filed returns contain errors, and 0.05% of all electronically filed returns contain errors, how much more likely is a manual filer to make an error than an electronic filer? a. 40,000 times more likely b. 4,000 times more likely c. 400 times more likely d. 40 times more likely

C

If you wish to calculate the interest on an investment with a rate of 3.58%, what number will you plug into your equation? a. 3.58 b. 0.358 c. 0.0358 d. 0.00358

C

If your state has a property tax rate of 0.056, and you pay $3,164.45 in property taxes every year, what is the assessed value of your property? a. $177,209 b. $21,265 c. $56,508 d. $48,684

C

In America, a person uses about 100 gallons of water each day, which is equal to 1,600 water-filled drinking glasses. How many water-filled drinking glasses would 281 Americans fill in a weeks time? a. 449,600 water-filled glasses b. 28,100 water-filled glasses c. 3,147,200 water-filled glasses d. 196,700 water-filled glasses

C

In order to go to college, Hank goes from working full-time making $28,000 per year to working part-time at half the salary for two years. The cost of his education will be $5,000. If Hank makes $33,000 per year after getting his degree, approximately how many years will it take him to recover his investment? a. 1 b. 5.6 c. 6.6 d. 12.2

C

In the table below, we are given two annuity plans, A and B, and the amount invested into each plan every month. Given this information, determine which of the two investments is an ordinary annuity, and the amount invested over a 12 month period. a. Investment A is an ordinary annuity with an annual contribution of $1,100 b. Investment A is an ordinary annuity with an annual contribution of $100 c. Investment B is an ordinary annuity with an annual contribution of $1,100 d. Investment B is an ordinary annuity with an annual contribution of $100

C

Manny makes the following purchases at the store: pair of jeans for $32.65 3 t-shirts for $14.89 each pair of sneakers for $39.99 The store is having a promotional sale where 10% is taken off of each customer's total purchase before tax. The sales tax is 8%. If Manny paid $114.03 , then he _____ for his purchase. a. paid $5.63 too little b. paid $3.28 too little c. paid the correct amount d. paid $8.45 too much

C

Mark currently works part-time with a salary of $8,000 per year. Mark plans to quit working and attend college for 4 years. If his college costs will total $64,000, how long will it take Mark to recover his investment assuming he has a salary of $32,000 upon graduating? a. 2 years b. 3 years c. 4 years d. 5 years

C

Mika wants to buy a condominium. He has the choice of buying it now or renting it with the option to buy at the end of 3 years. If he buys now, he could put $0 down, but he must pay closing costs of $7,100. His monthly mortgage payment will be $675. Mika decides to rent instead of buy because it is the cheapest option over the first 3 years. His move-in costs are one month's rent and a $750 security deposit.To the nearest dollar, what is the maximum amount of monthly rent payment he could pay? a. $636 b. $654 c. $828 d. $851

C

Mr. Thom makes $25,900/year salary as a document processor. He has made the following chart in order to divide his weekly paycheck into his accounts: Unfortunately, he has made a mistake in adding the numbers and has not allocated all of the paycheck. If he deposits the difference into the two emergency savings accounts, how much total per week can he then put towards emergency savings? a. $40 b. $60 c. $74 d. $55

C

Mrs. Williams estimates that on average her family recycles 12.6 pounds of plastic each month. In a year's time, how much landfill space will Mrs. William's family save if 1 pound of plastic saves 7.4 yards of landfill space? a. 932.40 yards b. 93.24 yards c. 1,118.88 yards d. 7.77 yards

C

Neil decides to go to a technical college for 18 months to get a degree in computer networking. There are 6 school quarters in the program with a tuition of $530 each. Books for the entire program cost $1,800. How much will it cost Neil to get his degree? a. $3,180 b. $3,920 c. $4,980 d. $11,340

C

Nika earns a gross pay of $73,000. Her total employee benefits are 22% of her gross pay and she has no job expenses. If Nika gets an increase in pay of $5,000, what will her total employment compensation be? (Note: Employee benefits are based on Nika's original gross pay.) a. $78,000 b. $79,100 c. $94,060 d. $95,160

C

Norm has $15,000 to deposit. His daughter is a junior in high school and plans to go to college. Recommend the best way for Norm to store his money. Note that the interest rates are expressed on an annual basis. a. A four-year CD paying 4.8% interest, with a substantial penalty for early withdrawal b. An online savings account offering 2.3% interest c. A money market account paying 3.5% interest, renewable for three-month commitments d. A checking account with no monthly fees

C

Of the following, which factor or factors would make it more likely that buying an extended warranty is a good idea? I. The extended warranty overlaps with the manufacturer's warranty. II. The product has a high probability of needing repair in the next few years. III. The product is a major purchase that you are unlikely to soon replace. a. I and III b. II only c. II and III d. I, II, and III

C

Orlando invested $16,000 in an eight-year CD bearing 6.5% simple annual interest, but needed to withdraw $3,500 after five years. If the CD's penalty for early withdrawal was one year's worth of interest on the amount withdrawn, when the CD reached maturity, how much less money did Orlando earn total than if he had not made his early withdrawal? a. $227.50 b. $682.50 c. $910.00 d. $455.00

C

Osceola County bonds worth $1,000 are selling at 88.391. What is the market price of one such bond? a. $1,088.39 b. $1,000.00 c. $883.91 d. $88.39

C

Rochelle plans to sell all of her shares when she can profit $6,250. What must the net asset value be in order for Rochelle to sell? a. $12.50 b. $31.44 c. $31.64 d. $100.00

C

Ron is 25 years old and is retiring at the age of 65. When he retires, he will need a monthly income of $4,123 for 20 years. If Ron contributes 10% of his monthly income to a 401(k) paying 5.5% compounded monthly, will he reach his goal for retirement given that his monthly income is 3,142.23? If he does not make his goal then state by what amount he will need to supplement his income. Round all answers to the nearest cent. a. Ron will meet his monthly goal of exactly $4,123 for retirement. b. Ron will meet his monthly goal of $4,123 for retirement with an excess of $125.34. c. Ron will not make his monthly goal of $4,123 and will need $359.74 to supplement his monthly income when he retires. d. Ron will not make his monthly goal of $4,123 and will need $450.61 to supplement his monthly income when he retires.

C

Ronnie wants to lower his utility bills to save money on his monthly expenses. He discovers that if he replaces his water heater with a solar water heater his monthly utility bills can decrease around 50% to 85%. At the end of the year Ronnie wants to calculate the percentage his new solar water heater saved him in the utility bills compared to last year. Ronnie?s total utility expenses for this year are $862.40 and last year the utility expenses were $1935.67. What percentage did Ronnie save on his utlility bills by switching to a solar water heater? a. 44.5% b. 97.8% c. 55.4% d. 67.5%

C

Rudy has been paying an annual homeowners insurance premium of $1,106.30 ($0.37 per $100 of value) since he first purchased his house. For the past six months, Rudy has completed some major improvements to his house to improve its overall value. If Rudy successfully adds $50,000 to the value of his house, what will his new annual homeowners insurance premium be? a. $185.00 b. $315.00 c. $1,291.30 d. $1,351.14

C

Samantha is trying to determine how she can save money by cutting her electricity bill. She is currently on a standard use plan for electricity and pays 8.5 cents per kWh. She keeps track of when she uses electricity and is thinking about switching to an interval use plan for electricity which costs 2 cents per kWh for off-peak use and 13 cents per kWh for on-peak use. Off-peak hours are from 8PM - 8AM and on-peak hours are from 8AM - 8PM. Below is the chart of her electricity usage: Samantha's Electricity Usage Per Month 1100 kWh between 8PM and 8AM 800 kWh between 8AM and 8PM Explain and justify which plan would best suit her needs. a. Samantha should not switch to the interval use plan, which would cost $126.00 more per month. b. Samantha should switch to the interval use plan, which would save her $126.00 per month. c. Samantha should switch to the interval use plan, which would save her $35.50 per month. d. Samantha should not switch to the interval use plan, which would cost $35.50 more per month.

C

Sammy is a full-time students who does not work. He is too old to stay on his parents health insurance and is looking for his own health care program. The two options he is considering are outlined in the tables below.

C

Say a certain service industry has 78.9 thousand jobs in 2003, but expects to increase at an average annual rate of 2.65 thousand jobs yearly from 2003 to 2013. If this holds true, what will be this industry's percent increase from 2003 to 2013? a. 28% b. 30% c. 33% d. 40%

C

Say that you are about to make a major purchase and would like to save money on sales tax. Which of these is a viable way to reduce the amount you will pay on sales tax? a. Sales tax is a tax like any other, so you can claim additional dependents and get a deduction on it. b. Businesses are allowed to charge a 1% fee for automatically calculating sales tax for you, so you should calculate the sales tax out yourself. c. Sales tax varies by state, so you can travel to a state with a lower tax rate and make your purchase there. d. If you buy an item on credit, the credit bureau must pay the sales tax instead of you, so you should make your purchase using a credit card.

C

Say you have a warranty on your laptop computer. Which of these situations is most likely to be covered by that warranty? a. The laptop is stolen. b. You short out the hard drive by installing a bigger power supply. c. The graphics system fails due to faulty wiring. d. The screen cracks when you drop the laptop.

C

Selena purchased some gifts for her nieces and nephews online. She bought 3 dolls each priced at $19.99 each and 4 remote control cars priced at $21.99 each. Selena was able to get an online coupon for $3 off on each remote control car that she purchased. There was no sales tax, but the shipping charge was $10.50. What was the total amount Selena paid for her online purchase? a. $135.93 b. $144.93 c. $146.43 d. $155.43

C

Sheila has a plan to save $45 a month for 18 months so that she has $810 to remodel her bathroom. After 13 months Sheila has saved $510. If the most Sheila can possibly save is $70 per month, which of the following statements is true? a. Sheila will meet her goal and does not need to adjust her plan. b. Sheila must save $50 per month to achieve her goal. c. Sheila must save $60 per month to achieve her goal. d. Sheila will not be able to achieve her goal.

C

Stephen used a reconciliation worksheet, but his checkbook balance does not match the final worksheet balance. Evaluate the following list of possible errors that he has made. Decide which items could potentially correct this problem if found and corrected. Choose the option below that correctly describes the items that could have caused this problem with Stephen's reconciliation. a. I, III, IV, and V could cause the problem, but not II. b. I, II, III, and V could cause the problem, but not IV. c. All five of the potential errors could cause this sort of problem. d. I and II could cause the problem since there are no math errors.

C

Stock in Globin Publishing costs $8.72 per share. Mary buys 105 shares of Globin Publishing, and her broker charges a commission of $348. How much did Mary pay for the stock? a. $468.41 b. $915.60 c. $1,263.60 d. $3,139.56

C

Sue's bank account has a balance of $899.83 before she starts spending money. She makes the following transactions: Sue is considering splitting the cost of a new TV with her roommate. Her share would be $305.22. Can Sue afford this? a. Yes, she can make the purchase and have money left over. b. Yes, but doing so will clear out her account. c. No, making that purchase will overdraw her account. d. No, she is overdrawn already.

C

Susie is thinking about changing her auto insurance policy at Fret-No-More Auto Insurance. Her current policy includes the following options: $50/100,000 limit for bodily injury, $25,000 limit for property damage, $250 deductible for collision, and $50 deductible for comprehensive. Which of the following changes would increase Susie's limits the most without increasing her monthly premium by more than $5.00?

C

Tara and Levi are trying to decide between homeowners insurance policies offered by two different agencies. AAA Insurance has offered to insure their home for an annual premium of $0.38 per $100 with a $500 deductible. Thompson's Insurance has offered to insure the same home for an annual premium of $0.26 per $100 with an deductible of $1,000.

C

The Hendersons have just bought a home that requires some monthly yard maintenance. They are trying to decide if they should hire a professional lawn care service to maintain the property or do it themselves. Below are the costs associated with both options: Professional Service Option Do-It-Yourself Option $75 for the first month $250 lawnmower $45 per month after initial visit $135 edger Includes mowing and edging the lawn, trimming the bushes, and raking the leaves. $69 hedge trimmer $25 rake How long would it take before the Hendersons would recover their costs if they chose to do it themselves over the professional service?

C

The actual income for this month has been reduced by $200. How can this budget be modified so there will be a positive actual net income? a. This budget can be modified by increasing the amount spent on food and utilities and decreasing the amount spent on clothes and rent, thereby maintaining a positive actual net income. b. This budget can be modified by reducing the amount spent on rent and utilities, thereby reducing overall expenses to have the maximum amount of money for all other expenses. c. This budget can be modified by reducing the amount spent on food and clothes, thereby reducing overall expenses to have the maximum amount of money for fixed expenses and maintaining a positive actual net income. d. This budget cannot be modified.

C

The chart below summarizes Ralph's annual expenses for the upcoming year. Based on the information in the graph, approximately what percent of his total budget will be for federal taxes? a. 6% b. 18% c. 30% d. 36%

C

The climate in which Jonah lives is mild all year long except during the hotter summer months. For 3 months out of the year, Jonah needs to use 4 portable fans to cool his home. If the electricity to use one fan costs 1 cent per hour and each fan is on for about 96 hours per month, what is his total electricity cost for the fans during one year? a. $6.72 b. $3.84 c. $11.52 d. $2.88

C

The table below shows the typical hours worked by employees at a company. A salaried employee makes $67,000 per year. Hourly employees get paid $25 per hour, but get $37.50 per hour for each hour over 40 hours. Sun. Mon. Tues. Wed. Thurs. Fri. Sat. 0 10 8 8 7 6.5 4.5 Which of the payment options would you recommend to a new employee? a. Either one. Hourly and salaried employees earn the same amount per week. b. Hourly pay. Hourly employees make more per week than salaried employees. c. Salaried pay. Salaried employees make more per week than hourly employees. d. There is not enough information given to compare weekly earnings.

C

There is a correlation between higher education and greater degrees of both income and job stability. What is one downside of continuing education that might cause someone to choose not to seek a higher level of education despite the benefits? a. If you have too much income, you will reach your goals too quickly. b. Most employers feel that pursuing a college degree shows a lack of decisiveness or conviction compared to diving straight into the workforce. c. Higher education can be expensive, and most students who seek degrees must accept some burden of debt. d. Getting a degree in one subject can disqualify you from getting a job in another field.

C

Theresa has $708 in her account and wishes to throw a party. She plans to include the following: When Theresa makes the calculations, she finds that she cannot afford everything that she would like to have. What is the cheapest aspect of the party that she can eliminate to keep from overdrawing her account? a. Venue b. Musicians c. Catering d. Refreshments

C

Tom is considering making changes to his policy to make insurance more affordable. Which of the following statements is not something Tom should consider when making changes to his policy? a. Increasing the deductible on collision insurance will reduce his overall monthly and annual expense, but will lead to more out-of-pocket expense if he is in a collision. b. Removing comprehensive insurance will reduce his overall expense, but will leave Tom entirely responsible for the cost of a new windshield if he hits a rock on the highway. c. Increasing the limits on his bodily injury insurance will reduce his overall expense by putting greater limits on how much the insurance company will pay for injuries. d. Removing property damage insurance will reduce his overall expense, but will leave Tom responsible for the cost of repairs to any other cars involved with Tom in a collision.

C

Trevor has an investment worth $6,774.50. He made his only deposit in it 22 years ago. Given that the investment yields 2.7% simple interest annually, how big was the initial deposit? a. $2,524.50 b. $4,024.03 c. $4,250.00 d. $11,404.88

C

Using the standard 28/36 guidelines, what is the maximum mortgage payment allowed for someone with an annual salary of $73,025? a. $2,190.75 b. $2,044.70 c. $1,703.92 d. $1,217.08

C

What can you do when the unit prices for two comparable items are listed using different units of measure? a. The secondary units don't affect the cost. As long as both prices are in dollars or cents, you can compare the two. b. The unit prices are based on the cost of the whole package, so divide each base cost by each unit price to get comparable units. c. Use conversion rates to change one unit into the other unit, so that both prices are listed using like units. d. Unit prices are ratios, so you can add the two prices together and divide by the smaller unit price to get a usable number.

C

What is a financial risk of being a homeowner? a. The home may be difficult to sell. b. The home may need repairs. c. The home may decrease in value. d. The home may have taxes.

C

What is risk, as pertains to investing? a. The time period needed to find a buyer for an investment. b. The cost of purchasing an investment. c. The chance you take that your investments will lose their value. d. The opportunity cost of tying your money up in investments.

C

What is the SEC? a. The largest stock exchange in North America b. The margin of profit you gain from stock c. The government agency which oversees the trading of stock d. The total worth of your stock portfolio

C

What was the price of SFT Legal yesterday? a. $47.17 b. $56.11 c. $50.37 d. $61.85

C

When shopping for life insurance, the best strategy is to: a. Follow your agent's recommendations. They are the experts and it is the agent's job to make sure you get the products that are right for you. b. Buy your coverage through your employer, if possible. c. Figure out how much you need, then comparison shop using the Web and other resources. d. Wait until you are older so that you can buy a cheaper, shorter term policy.

C

Which is a step in the process of calculating successive discounts of 8% and 10% on a $50 item? a. take 2% of $50 b. take 8% of $46 c. take 10% of $46 d. take 18% of $50

C

Which kind of bond pays interest which is exempt from tax? a. Treasury Bonds b. Junk Bonds c. Municipal Bonds d. Corporate Bonds

C

Which method or methods listed below describe a solid system for keeping financial records? I. Making a mental note of all purchases made during the week. II. Recording money spent in a hand-held notebook. III. Organizing receipts and transactions on a computer. a. I only b. II only c. II and III d. I, II, and III

C

Which of the following is not true about a loan discount point? a. A point is purchased at the time of closing. b. A point is purchased for 1% of the loan amount. c. A point reduces the interest rate by 1%. d. A point bought will reduce the monthly mortgage payment.

C

Which of the following statements describes a part of a reasonable method for increasing the amount of savings in the budget. a. Keep "Essential Expenses (Fixed)" the same amount every time the budget is revised. b. Occasionally pay a bill later than due, in order to increase available cash. c. Find a way to reduce "Non-Essential Expenses" in the monthly budget. d. Use only money from the coin jar towards "rainy day" expenses.

C

Which of the following statements is true? a. A 30 year fixed mortgage will always result in the lowest payment. b. You must have at least a 20% down payment to get a competitive interest rate. c. The lower your interest rate is, the lower your monthly payments are. d. The faster you pay off your mortgage, the lower your monthly payments are.

C

Why does the government issue only bonds, while companies issue both stocks and bonds? a. The US government does not involve itself in the stock market because it does not want to risk losing money if there should ever be a crash in the stock market. b. Because the stock market is used as a form of gambling, the government refuses to associated itself with the stock market as a way to discourage gambling. c. Stock in a company gives the holder part-ownership of the company, with voting rights on big decisions, and profits when the value goes up. The people already vote on happenings in the government and inherently have ownership of the government. d. A stock is a part ownership in a company, and the leaders of the government won't have the people owning the government.

C

Why would a Roth 401(k) investment plan allow you to invest the most amount of money? a. The federal government subsidizes a portion of a Roth 401(k) to help people in lower tax brackets save for retirement. b. Roth 401(k) plans are reserved for administrators and executives, who have a higher income which would allow them to invest more. c. A Roth 401(k) plan takes money after tax has been removed from gross income, and has a contribution limit, but withdrawal is tax free. d. The contribution limit of a Roth 401(k) plan is more than double the limit of the traditional 401(k).

C

Wilma buys a new game that is priced $43.89. She gets successive discounts of 15% followed by 5% off on the game. The purchase price of Wilma's game is _____ of the original price. a. 79.5% b. 80% c. 80.75% d. 82%

C

You earn $1,166 gross taxable income every week, and have claimed no exemptions. Assuming that you have no other sources of income, what is the amount of income tax withheld each week?

C

You give up a full-time salary of $45,000 a year to go to school for 2 years. The total cost of going to school is $30,000. If you want to be able to recover your investment in 5 years or less, what is the minimum salary you would need to earn upon earning your degree? a. $51,000 b. $60,000 c. $69,000 d. $75,000

C

You have $12,000 to invest and want to keep your money invested for 8 years. You are considering the following investment options. Choose the investment option that will earn you the most money. a. 3.99% compounded monthly b. 4% compounded quarterly c. 4.175% compounded annually d. 4.2% simple interest

C

You have a gross income of $117,151 and are filing your tax return singly. You claim one exemption and can take a deduction of $2,713 for interest on your mortgage, an adjustment of $2,791 for business losses, an adjustment of $1,346 for alimony, a deduction of $2,086 for property taxes, a deduction of $2,376 for contributions to charity, and an adjustment of $1,091 for contributions to your retirement fund. The standard deduction for a single filer is $5,700, and exemptions are each worth $3,650. What is the difference between your adjusted gross income and your taxable income? a. $16,053 b. $9,350 c. $10,825 d. $14,475

C

You have a home with a market value of $144,700, which has an assessment value of 72% of that amount. Your city has a property tax rate of 0.039. You know that 65% of your property tax dollars go to public schools. To the nearest dollar, how much of your taxes went to funding schools? a. $4,063 b. $3,668 c. $2,641 d. $6,772

C

Auto insurance options offered by AA Auto Insurance are outlined in the table below. What monthly payment would you expect for an insurance policy through AA Auto Insurance with the following options? Bodily Injury: $25/50,000 Property Damage: $25,000 Collision: $250 deductible Comprehensive: $100 deductible

C. $54.85

A pharmacist is trying to stock the pharmacy with cheaper alternatives for customers. She will stop carrying the more expensive items. In doing so, she is trying to determine which of the following forms is the most expensive. Tablet form comes in 50 mg tablets and cost $75.00 for a bottle of 100 tablets. Capsule form comes in 75 mg capsules and cost $63.75 for a bottle of 85 capsules Caplet form comes in 100 mg caplets and cost $70.00 for 40 caplets. Based on the given information, which form is the most expensive?

C. the caplet form is more expensive

$3,250 is withdrawn at the end of every month from an account paying 4.1% compounded monthly. Determine the previous value of the account, given that withdrawals are made from the account for 30 years. Round to the nearest cent. a. $1,170,000.00 b. $2,304,150.99 c. $674,899.66 d. $672,601.61

D

A clearance rack is marked as 35% off the regular price. A shirt on the clearance rack has a regular price of $45.99. If there is 7.25% sales tax, what will the shirt ring up for at the register? a. $17.26 b. $21.67 c. $29.89 d. $32.06

D

A combination washer/dryer costs $1,179. New parts for this washer/dryer cost $211, labor to repair it costs $553, and shipping it to and from a repair center costs $152. A full warranty, which covers all aspects of repairing the washer/dryer, costs 30% of the price of the washer/dryer. A limited warranty, which only covers labor costs, only costs 14% of the price of the washer/dryer. Assuming that the washer/dryer needs repairs which include parts, labor, and shipping, which warranty is the better deal, and by how much, rounded to the nearest dollar? a. The limited warranty will end up costing the consumer $189 less. b. The limited warranty will end up costing the consumer $363 less. c. The full warranty will end up costing the consumer $553 less. d. The full warranty will end up costing the consumer $174 less.

D

Agnes pays state income tax equal to 3.75% of her federal taxable income. She pays federal income tax equal to 28.4% of her federal taxable income. This year, she paid $15,449.60 in federal income tax. How much did Agnes pay in state income tax? a. $573.36 b. $4,387.69 c. $1,170.04 d. $2,040.00

D

An investor buys 400 shares of stock in a fund when the net asset value is $19.62 and the offer price is $19.84. The investor sells these shares when the net asset value is $43.19 and the offer price is $43.56. Determine the amount of profit the investor earns. a. $9,576 b. $9,488 c. $9,428 d. $9,340

D

Athena priced each of her art pieces at the same price and displayed them for sale in two different art shows. She made $495.80 from the first art show and $371.85 from the second show. If Athena sold 7 pieces of art, what price did each piece sell for? a. $109.52 b. $109.66 c. $123.81 d. $123.95

D

Because Bernard has some health issues, he must pay 15% more for life insurance. About how much more annually will a $115,000 10-year term insurance at age 35 cost Bernard than someone of the same age without health issues?

D

Ben and his housemates signed a lease for an apartment for 12 months for $563 per month of which Ben agreed to pay $215 per month. Which of the following statements best gives the reasons that Ben's rent payment is an essential (fixed) expense? a. It cannot be eliminated in a later budget, in order to save money. b. Living expenses have a higher priority than any other type of expense. c. The spender controls the amount of the rent by choice of apartment. d. He agreed to pay the same amount every month.

D

Billy's employer pays for 65% of his annual health insurance premium. Billy has the rest deducted in equal amounts from his paycheck. If Billy has $105.73 withheld from his paychecks twice each month, how much does his employer contribute towards his health insurance on an annual basis? a. $683.18 b. $1,366.36 c. $2,356.27 d. $4,712.54

D

Calculate the Social Security and Medicare tax that would be applied to an annual salary of $235,430. Use $106,800 for maximum taxable earnings. a. Social Security tax: $1,459.67, Medicare tax: $341.37 b. Social Security tax: $14,596.66, Medicare tax: $3,413.70 c. Social Security tax: $662.16, Medicare tax: $341.37 d. Social Security tax: $6,621.60, Medicare tax: $3,413.70

D

Casey has a job doing valet parking. Casey makes an hourly rate of $4.55 per hour plus tips. Last week Casey worked 26 hours and made $898.55. How much in tips did Casey earn last week? a. $34.56 b. $118.30 c. $157.25 d. $780.25

D

Chloe lives in an area where she runs the air conditioner during the 4 hottest months of the year. The air conditioner runs for 7 hours per day at a cost of 21 cents per hour. How much does she spend per year on utility bills for the air conditioner?(Assume there are 30 days in each month) a. $705.60 b. $588.00 c. $216.09 d. $176.40

D

Choose the correct answer and rationale. "The prices listed on retail websites..." a. ...are open to negotiation, because you can email the company. b. ...are reliable, because you have proof of the advertised price. c. ...are unreliable, because internet commerce does not have the same regulations as normal commerce. d. ...are often below the total cost, because they usually do not include shipping charges.

D

Colin wants to set up an aquarium.. He already has a tank, but needs to purchase fish, filters, and plants. If the cost of the fish is $84.79, the filters usually cost $60.45 but Colin finds them on sale for $44.75, and the cost of the plants is $18.66, determine how much of Colin's $488.85 savings will be used to set up his aquarium. a. $289.81 b. $163.90 c. $340.65 d. $148.20

D

Consider Michelle and Gladys, two neighbors who each earn the same salary. Gladys pays less in federal income taxes than Michelle does. Which of the following is a possible explanation for this? a. Michelle and Gladys are in different tax brackets. b. Gladys pays less in federal income taxes, but Michelle pays less in state income taxes. c. Gladys has more money in savings than Michelle. d. Gladys is taking advantage of more deductions and credits than Michelle.

D

Determine the total annual FICA tax for an annual salary of $38,480. a. $294.37 b. $717.96 c. $2,385.76 d. $2,943.72

D

Elly buys 75 shares of stock in a mutual fund for a total investment of $450. She sells 50 shares of her stock for total proceeds of $400. Determine if Elly made a profit or loss, and how much per share. a. loss of $0.67 per share b. loss of $2 per share c. profit of $0.67 per share d. profit of $2 per share

D

Five years ago, Benjamin invested in Parchar Special Effects. He purchased four par value $1,000 bonds from Parchar Special Effects at a market rate of 96.230. Each bond had an interest rate of 7.2%. Benjamin also purchased 200 shares of stock in the same company, each of which cost $19.08 and had a yearly dividend of $2.04. Today, bonds from Parchar Special Effects have a market rate of 104.595, and stock in Parchar Special Effects costs $22.62. If Benjamin liquidates his portfolio and sells all of his investments, which aspect of his investment will have yielded him a greater total profit, and how much greater is it? a. The bonds yielded $940.20 more in profits than the stocks. b. The bonds yielded $33.00 more in profits than the stocks. c. The stocks yielded $373.20 more in profits than the bonds. d. The stocks yielded $973.36 more in profits than the bonds.

D

Gareth is single and has a net taxable income of $54,446. Over the year, his employer has collected $9,100 in withheld payroll tax. Based on the table below, what should Gareth expect when his taxes are due?

D

Given the following information, choose the brand that is the better buy. Brand A: $1.25 for 10 ounces Brand B: $1.47 for 12 ounces Brand C: $1.68 for 14 ounces Brand D: $1.84 for 16 ounces a. Brand A b. Brand B c. Brand C d. Brand D

D

Harry and Helen are married, filing jointly. Their combined taxable income is $65,922. Every week, a total of $187 is withheld from their pay. Based on the table below, what can Harry and Helen expect when their taxes are due?

D

Housing expenses are commonly referred to as PITI. What does PITI stand for? a. principal, income, taxes, investment b. payment, investment, terms, insurance c. payment, interest, terms, income d. principal, interest, taxes, insurance

D

How much annual income would you need to have if, using the 28/36 ratio, your maximum allowable recurring debt is $500? a. $21,430 b. $30,000 c. $62,500 d. $75,000

D

However, Jason's bank statement says that his ending balance is $473.33. Which of the following is a possible explanation for the discrepancy? a. Jason actually made two $20 charitable donations but forgot to write one of them down. b. Jason listed the refund as a credit, but it should be a debit. c. Jason listed the groceries out of habit, but he did not actually purchase them this week. d. Jason transposed the digits on the microwave's price, which actually cost $86.74.

D

Ian invests $13,670 in a savings account at his local bank which gives 1.9% simple annual interest. He also invests $6,040 in an online savings account which gives 4.5% simple annual interest. After nine years, which one will have earned more interest, and how much more interest will it have earned, to the nearest dollar? a. The local account will have earned $7,521 more interest. b. The local account will have earned $3,199 more interest. c. The online account will have earned $3,090 more interest. d. The online account will have earned $109 more interest.

D

If the FDIC has an insurance fund of $67.8 billion and must use 7.6% of it to cover several failed banks, approximately how much money is left in the fund? a. $5,153 million b. $57.49 billion c. $72.95 billion d. $62.65 billion

D

If there is a positive correlation between number of years of education and the amount of vacation time, which of the following careers would you expect to have the most vacation time? a. police officer, associates degree b. accountant, bachelor's degree c. lawyer, master's degree d. pharmacist, docotorate degree

D

If you were teaching a foreign visitor about checking and savings accounts at banks and credit unions in the USA, which item below would you say consumers of these accounts usually do not have as a protection of their rights? a. Government-backed insurance on the deposits. b. Regulation of bank practices by government agencies. c. A written statement providing the current fees and policies for the account. d. No automatic fees charged to the account.

D

In 2007, the FDIC's insurance limit was $100,000 per person per bank. Approximately 62% of Gil's deposits were insured by the FDIC. Which of the following was a possible setup for Gil's deposits? a. A $13,000 money market account at Bank T; a $31,000 CD, $44,000 savings account, and $16,000 checking account at Bank U; a $70,000 CD and $28,000 money market account at Bank V b. A $54,000 checking account and $84,000 savings account at Bank T; a $28,000 money market account, $27,000 savings account, and $20,000 CD at Bank U; a $130,000 CD at bank V c. A $60,000 money market account and $70,000 savings account at Bank T; a $40,000 checking account and $92,000 savings account at Bank U; a $45,000 CD and $75,000 checking acount at Bank V d. A $108,000 savings account and $46,000 CD at Bank T; a $36,000 money market account and $38,000 CD at Bank U; a $63,000 checking account, $80,000 savings account, and $70,000 money market account at Bank V

D

In addition to the following closing costs listed below, the buyer pays a realtor commission that is 3.5% of the loan amount. If the loan amount is $165,000, how much was paid at closing? a. $2,322 b. $2,899 c. $5,775 d. $8,097

D

In considering career options, Ella would like to enter an industry with at least 50% growth from 2000 to 2010. Based on the above graph, which of the following industries is not in that category? a. Health services b. Computer and data processing c. Residential care d. Management and public relations

D

Jean told her stockbroker to purchase 300 shares of stock of Company ABC at $20 per share. The fee that the stockbroker charges for this service is called ____. a. Dividend b. Yield c. Net Proceeds d. Commission

D

Joshua is 25 years old and has a high risk job making $72,000 a year. The insurance company charges him an extra 20% on top of his premium rate because of his job. If Joshua wants a policy that will replace five years of his salary, what is the annual premium for the cheapest policy?

D

June has a savings account with an annual simple interest rate of 2.6%. She hopes to gain $6,500 in interest over a period of eleven years. To accomplish this, June invested $17,801 in the account, but later realized that this was not enough money. To the nearest dollar, how much more money should June have initially invested to reach her goal? a. $6,335 b. $3,715 c. $1,409 d. $4,926

D

Krista and Nick put a down payment of 20% on the purchase of their house, and then financed $200,000. What was the purchase price of the house? a. $160,000 b. $220,000 c. $240,000 d. $250,000

D

Kyle and Linda are married with two children at home and a mortgage. Kyle's net pay per year is $32,000 and Linda's is $48,000. Their monthly expenses are $3,500. Kyle and Linda each contribute 15% of their earnings to a retirement fund and they have $5,000 in savings. They also have a $100,000 life insurance policy on Kyle, but none on Linda. As their financial advisor, what part of Kyle and Linda's financial plan would you encourage them to work on and why? a. Their plan for managing income. Their net cash flow is negative. b. Their plan for managing their liquidity. They are not prepared for emergencies. c. Their plan for retirement. They don't contribute enough to meet their long term goals. d. Their plan for protecting their assets. They should have life insurance on Linda.

D

Last year Frank had a total income of $58,800. He sold a house and made a profit of $27,940. He also had monthly income of $80 from investments. Assuming Frank works 25 hours per week and 52 weeks per year as an hourly employee, how much more an hour would Frank had to have earned last year in order to have a total income of $59,970? a. $0.63 b. $0.72 c. $0.80 d. $0.90

D

Lauryn's wages were not as much as she had budgeted. How can her budget be modified so there will be a positive actual net income?

D

Leiff goes online to buy a new video game. He finds a site that currently has a promotion of 15% off on all orders over $50. Leiff decides to buy his video game, with a price tag of $128, at this site because he knows that he will get the 15% discount when he checks out. Leiff pays 5.3% sales tax on the discounted price and pays a shipping fee of $4.75. What is the total of Leiff's online purchase? a. $112.84 b. $114.57 c. $118.82 d. $119.32

D

Liam has purchased a fee-for-service health insurance plan from Leroux Health Insurance. Plan A includes a $248.00 monthly premium and an annual deductible of $5,500.00 (not including co-pays). Liam is a fairly healthy young man. He visits his primary care physician three times a year on scheduled visits. He sees a chiropractic specialist every week to help with lower back pain. He has no current prescriptions that need refilling regularly. Assuming Liam maintains his regular visits with his primary care physician and his chiropractor, and avoids any trips to the emergency room or urgent care, how much will Liam pay in health care related fees this year?

D

Mark is looking for professional financial assistance. Mark has never invested before and is not quite sure where to start. He knows that he wants to build up investments for future projects such as retirement, but he is not sure how to navigate investment in light of his existing debts. Recommend an appropriate financial professional for Mark. a. Full-service broker b. Discount broker c. Accountant d. Financial planner

D

Matthew paid $779,000 for a ten-room apartment building nine years ago. The building has lost 2.7% of its value every year. Matthew keeps all of his rooms rented out continually, charging a monthly rent of $810 per room. Upkeep on the building costs Matthew $35,900 every year. If Matthew sells the building, what will his total profit be, to the nearest hundred dollars? a. $737,100 b. $551,700 c. $362,400 d. $381,600

D

Maya works 16 hours per month at her part-time job earning $6.75 per hour. She earns some additional money house sitting for neighbors and friends. Maya charges $30 per day to house sit if there are no pets. If the house sitting includes pets, then she charges $40 per day. Last month, Maya spent 3 days house sitting with no pets and 5 days house sitting with pets. What is the total amount of earnings Maya had for the month? a. $270 b. $290 c. $378 d. $398

D

Mike and Kate plan to save money for their wedding over a 20 month period. They will need to save $8,000 to help pay for the wedding. They set aside the same amount each month. After a year they saved $4,000. Mike and Kate know they must adjust their plan in order to meet their goal, so they came up with the following options: Option A: Stay with saving the same amount they've been saving each month but postpone the wedding 2 months. Option B: Increase the amount of money they save each month by $80 from what they've been saving. Which of the following is a true statement? a. Only option A will allow them to meet their goal. b. Only option B will allow them to meet their goal. c. Both options A and B will allow them to meet their goal. d. Neither option A nor option B will allow them to meet their goal.

D

Mr. and Mrs. Lorenzo want to buy a home valued at $213,500. If they have 18% of this amount saved for a down payment, how much have they saved? a. $384.30 b. $3,843.00 c. $38,043.00 d. $38,430.00

D

Nastasha has a gross income of $66,429. She can make adjustments of $14,490 for business losses, $3,584 for business expenses, and $4,813 for contributions to her retirement plan. What is Nastasha's adjusted gross income? a. $109,971 b. $22,887 c. $72,522 d. $43,542

D

Niah works as a retail sales clerk earning $18,000 per year. She plans to go to school for medical billing that has a median salary of $35,000. The cost of her education will be $20,000. If Niah does not work for the 2 years that she is in school, about how long will it take her to recover her investment if she gets a medical billing job making the median salary when she graduates? a. less than 1 year b. 1.2 years c. 1.6 years d. 3.3 years

D

Nicole deposits $2,136 in a savings account paying 5.36% interest. To the nearest dollar, how much money does Nicole have in total after nine years? a. $213 b. $1,030 c. $1,272 d. $3,166

D

Oscar has elected to have 23% of his federal income tax withheld as state income tax. If $154.00 was withheld as federal income tax on his last paycheck, how much will be withheld from his paycheck for income tax in all? a. $35.42 b. $118.58 c. $177.00 d. $189.42

D

Planning for the possiblity that your home might get struck by lightning and catch on fire is part of a plan for _____. a. financing b. managing income c. managing liquidity d. protecting assets

D

Rachel bought 1,500 shares of Cawh Consolidated Bank at a price of $24.85 each. As the price climbed, she sold off parts of her holdings. She sold off 250 shares at $28.32 apiece, she sold 800 of her shares at $33.60 apiece, and she sold off the remainder of her shares at $39.94 apiece. If Rachel's broker charges a commission of $65 per $1,000 of stock bought or sold, how much profit did Rachel make, to the nearest dollar? a. $20,459 b. $51,933 c. $14,661 d. $8,859

D

Rate the following bank accounts from most to least liquid: CD, savings account, checking account, money market account. a. CD, savings account, checking account, money market account b. Savings account, checking account, CD, money market account c. CD, money market account, savings account, checking account d. Checking account, savings account, money market account, CD

D

Ruby has a monthly salary of $1,800 and also earns 6% commission on her sales. If Ruby had $37,000 in sales last month, what were her total earnings for the month? a. $1,908 b. $2,220 c. $2,328 d. $4,020

D

Ryan works at the car wash making $5.30 per hour plus tips. Last week Ryan worked 32 hours and earned $403. How much in tips did Ryan make last week? a. $86.40 b. $148.00 c. $169.60 d. $233.40

D

Sam invests $9,400 in a fund yielding 5.2% simple interest annually. At the same time, Pat shops around for a better interest rate and invests $9,400 in a fund yielding 6.0% simple interest annually. After seven years, how much more interest has Pat's fund earned than Sam's fund? a. $817.80 b. $3,948.00 c. $652.40 d. $526.40

D

Samantha's college runs on a trimester schedule so she receives a bill 3 times a year for tuition. Each trimester costs $1,450, and Samantha must complete 2 years of college to receive her degree. The average cost for books each trimester is $350. Approximately what will be the total cost for Samantha to get her degree? a. $4,700 b. $5,400 c. $9,050 d. $10,800

D

Sammy usually takes a 18 minute shower in the morning. If a 4 minute shower uses an average of 20-40 gallons of water, what is the maximum gallons of water that Sammy could be using in her shower? a. 72 gallons of water b. 360 gallons of water c. 90 gallons of water d. 180 gallons of water

D

Sandy and Alex are married, with no dependents. They wish to file a joint tax return. Both of them work, but their combined salaries only put them at a slightly above-average income. They would also like to deduct interest paid on their student loans. Recommend an appropriate 1040 form for Sandy and Alex to fill out. a. 1040 b. 1040-EZ c. 1040-2 d. 1040-A

D

Stan has made a $125.30 monthly deposit into an account that pays 1.5% interest, compounded monthly, for 35 years. He would now like to draw a monthly salary from the account. Determine the amount that Stan can withdraw each month for 20 years, if he plans on not having anything in the account at the end of the 20 year period and no future deposits are made to the account. a. $69,242.49 b. $69,159.05 c. $333.29 d. $333.71

D

Steven is looking at banks for checking and savings accounts. Some offer home loans and others do not. Steven may need a home loan sometime in the next few years. But he wonders if he should really ask what kinds of loans the bank makes, because he is getting a checking account, not a home loan. Which statement below gives the best reason for Steven to consider loan availability in choosing a checking account? a. The bank offers $100 to customers who get a pre-approval for a home loan. b. The bank provides ATMs in all the suburbs where Steve is interested in living. c. Banks that provide home loans can usually charge lower fees on checking accounts. d. If he needs a home loan in the future, he will have a relationship with the bank.

D

The Greens want to put an addition on their house 18 months from now. They will need to save $10,620 in order to achieve this goal. They set aside the same amount each month, and after a year discover they have saved $6,120. The Greens must adjust their plan in order to meet their goal, so they came up with the following options: Option A: Stay with saving the original amount each month but put the addition on one month later than originally planned. Option B: Increase the amount of money they save each month by $120 from their original plan. Which of the following statements is true? a. Only option A will allow them to meet their goal. b. Only option B will allow them to meet their goal. c. Both options A and B will allow them to meet their goal. d. Neither option A nor option B will allow them to meet their goal.

D

The stores below each have the same snowboard for an original price of $189.59. At which store can you get the snowboard for the lowest price? Store A: Sale of 30% off and a successive discount of 10% off. Store B: Sale of 20% off and a successive discount of 20% off. Store C: Sale of 40% off. a. All of the stores have the same discounted price. b. You can get the lowest price at Store A. c. You can get the lowest price at StoreB. d. You can get the lowest price at Store C.

D

The table below shows the earnings, in thousands of dollars, for three different commissioned employees. $2,000 + 3% on all sales 7% on all sales 5% on the first $40,000 + 8% on anything over $40,000 December 4.4 5.6 5.2 January 3.5 3.85 3.6 February 4.7 4.9 4.4 Who had the largest dollar amount in sales for the month of December? a. The salary plus commission employee. b. The straight commission employee. c. The graduated commission employee. d. They each had the same dollar amount in sales.

D

Timothy periodically purchases bonds issued by Prince Waste Collection. Last year, he bought two bonds in February, two bonds in June, and one bond in August, then sold them all in October. Prince Waste Collection bonds were selling at 94.593 in February, 92.661 in June, 105.480 in August, and 102.882 in October. If each bond that Timothy bought had a par value of $1,000, how much profit did he make from buying and selling these bonds? a. $15.91 b. $34.42 c. $159.12 d. $344.22

D

To be able to go on the band trip, four band members each get a part-time job. Each person has 5 weeks in which to save his or her money. Analyze the four individual plans below and decide which of the four people will reach his or her goal of saving $285? Member A: Works 8 hours per week at $6.15 per hour Member B: Works 10 hours per week at $5.85 per hour Member C: Works 7 hours per week at $7.25 per hour Member D: Works 9 hours per week at $6.35 per hour a. A and B b. A and C c. B and C d. B and D

D

Tomaso and three of his friends are splitting the cost to rent a house for $975 a month. The security deposit is $1,500 and there is a cleaning deposit of $325. They must pay first and last month's rent upon moving in.Tomaso has a cat, so he will pay an additional $150 pet deposit that his friends won't. Approximately how much will Tomaso pay to move in? Round your answer to the nearest dollar. a. $850 b. $944 c. $981 d. $1,094

D

Trevor's total employment compensation is $33,500. If Trevor has no job expenses and his gross pay is $28,600, then his total employee benefits are _____% of his gross pay. a. 4.9 b. 8.5 c. 14.6 d. 17.1

D

What is one difference between yearly and monthly budgets? a. Yearly budgets show a greater degree of planning, so it is appropriate to plan expenses more strictly and in a more detailed fashion in a yearly budget. b. Monthly budgets should focus on the short term, so it is not appropriate to consider planned but future expenses (such as a vacation) in a monthly budget. c. Yearly budgets are a better view of your financial goals, so you should work very hard to avoid changing yearly budgets. d. There is more uncertainty as you plan further ahead, so a yearly budget needs more room to account for unplanned expenses than a monthly budget does.

D

What is the biggest difference in who controls the 401(k) and IRA retirement plans? a. IRA is intended for a stable retirement income, while a 401(k) is reserved for emergencies or luxuries. b. 401(k) is a good last minute investment for retirement, while IRAs require years of investing. c. IRAs allow one to save a lot more money towards retirement than a 401(k). d. A 401(k) is controlled and monitored by an employer, and an IRA is controlled by the investing individual.

D

What is the difference between a full warranty and a limited warranty? a. A full warranty is a guarantee to replace a faulty product, while a limited warranty is a guarantee to repair a faulty product. b. A full warranty will pay for repairs any number of times that the product breaks, but a limited warranty will only pay a certain number of times. c. A limited warranty is only good for a certain length of time, but a full warranty is good forever. d. A full warranty will cover any repairs or replacement that the product needs, while a limited warranty will only pay for certain repairs.

D

What is true about the way you should approach financial goals across different stages of your life? a. Failure to meet a financial goal is a sign of personal weakness, so you should never alter a goal until you have completed it exactly as you imagined it. b. You need to be consistent and determined when it comes to financial goals. The financial goals you make as a young adult should stay in place for the rest of your life. c. Most people tend to make more money as they grow older and more experienced. After a certain point in your life you should have enough money to meet all of your financial goals, at which point you will no longer need to concern yourself with long-term goals. d. As you progress through life, your values and financial possibilities will gradually change, which leads to an evolution of your financial goals over time.

D

When you are purchasing green cleaning products, which of the following informative information should not grab your attention? a. performance b. ingredients c. effects on health d. celebrity endorsements

D

Where does the FDIC's reserve fund come from? a. The FDIC has access to federal tax revenue. b. If an insured bank fails, the FDIC keeps the money at that bank that is beyond the insured limit. c. A certain amount of money goes directly from the Treasury to the FDIC's reserve fund. d. Insured banks pay a premium on the money insured.

D

Which of the following are possible amounts for the third check and the cash that Cindy deposited? a. no cash and a $303.68 check b. $140.50 in cash and a $267.14 check c. $99.32 in cash and a $155.55 check d. $122.04 in cash and a $205.64 check

D

Which of the following companies offers the greatest total employment compensation? Company A Gross pay $38,200 Insurance $3,500 Paid time off $4,100 Company B Gross pay $39,000 20% of gross pay in total employee benefits Job expenses $700 Company C Gross pay $39,900 Insurance $3,200 Paid time off $3,900 Job expenses $1,000 Company D Gross pay $39,400 18% of gross pay in total employee benefits a. Company A b. Company B c. Company C d. Company D

D

Which of the following is always a true statement? a. total employee benefits - total job expenses = total employment compensation b. gross pay + total job benefits = total employment compensation c. gross pay - total job expenses = total employment compensation d. total job benefits - total job expenses = total employment compensation

D

Which of the following is considered a purchase tax? a. income tax b. Social Security c. property tax d. excise tax

D

Which of the following is not a way health insurance helps to save you money? a. In many cases, your employer will pay a certain portion of your health insurance premium. b. Some health care plans have made arrangements with health care providers to offer their services at a lower rate. c. Many times, you only have to pay a deductible to receive goods or services. The remaining balances are paid by your insurer. d. Most health care plans set a portion of your premium aside in an escrow account so that you have money available in case of a medical emergency.

D

Which of the following is not an advantage of renting? a. ease of mobility b. fewer responsibilities c. lower initial costs d. restricted lifestyle

D

Which of the following is not considered one of the four basic types of auto insurance? a. Collision b. Bodily Injury c. Property Damage d. Legal Responsibility

D

Which of the following is not something that you could do with a normal checking account? a. Deposit cash into your account. b. Demand in writing that money be paid to another person from your account. c. Give permission to a merchant to demand money from your account. d. Make purchases or get cash now, and pay back the bank in monthly payments.

D

Which of the following is something that should not be a consideration when choosing a health care plan? a. annual premiums to be paid by the insured individual and family b. deductible or co-pay to be paid by the insured individual and family c. total coverage received by insured individual and family d. the coverage the insured individual and family already receive in auto insurance

D

Which of the following kinds of bonds earn interest? I. Corporate bonds II. Bonds selling at a discount III. Municipal bonds a. I and II b. II only c. I and III d. I, II, and III

D

Which of the following retirement plans places a maximum amount that an individual can contribute to the fund in a given year at $5,000? a. 401(k) b. Tax-Deferred Annuity c. Pension d. IRA

D

Jesse works for an engineering firm earning $54,000 per year. Jesse is 53 years old and plans on retiring at age 65. He?s considering working part-time so that he can work on another degree. His new degree would take him 3 years to earn and cost a total of $30,000. After getting the degree, Jesse will make $75,000 per year. Do you think that the new degree is worth the investment? Explain your reasoning.

Jesse will spend $111,000 to earn the degree: 3 years loss of 1/2 his salary + cost of education = 3(27,000) + 30,000 He will make $21,000 per year more after earning his degree, so it will take a little over 5 years to recover his investment. This means that he will work an additional 4 years making $21,000 more per year for a total of $84,000, so it seems like a wise investment.

Which of the following is not an advantage of buying a home? Tax savings Potential Economic Gain Pride in Ownership Lower Initial Cost

Lower Initial Cost

Joanne has a goal of buying a townhome and saved for 5 years. She expected to have the down payment of $15,000 saved by now but unfortunately she is $2,000 short. Joanne is stressed and ready to give up. As her friend, what would you say to Joanne to convince her that she should not give up? Give her an option of how she might adjust her plan.

Since buying a home is a long term goal, Joanne has time to adjust her plan and still achieve her goal in a reasonable time frame. She has managed to save $15,000 in 5 years, which is an average of $3,000 per year. At this rate, Joanne could still buy her home within the year. She should stay positive and set a new goal for herself. If she is really motivated, she could even bring in some additional income so that she can get the extra money sooner.

When considering whether or not to buy an extended warranty for a large purchase, what are some factors that you should consider?

The durations and coverage of the manufacturer's warranty, as well as whether or not the extended warranty overlaps with it, should be taken into consideration. The likelihood of the item needing repairs, as well as the cost of repairing it, should also be considered. Furthermore, it is helpful to consider the cost of the warranty, its relation to the cost of the item, and whether it is a full or limited warranty.

A point of sale transaction occurs when an ATM withdrawal is made.

True

Create an example of a situation where there is a negative cash flow.

When your income is $350 a month, but your expenses total $400 a month.

For which of the funds shown would you pay the most commission on the purchase of 100 shares? a. Green Energy b. TJH Small-Cap c. Upton Group d. WHI Health

A

Given the graph below, predict the cost of utilities for Seattle, WA for the month of September based on the relationship with the other plotted line for Baltimore, MD. a. $263 b. $360 c. $151 d. $73

A

The book store is having a sale where all hardcover books are 20% off. Jamie also has a coupon for 15% off any fiction book. Jamie buys a hardcover fiction book that is priced $32.99. How much will Jamie save by buying the book on sale and using the coupon? a. $10.56 b. $11.55 c. $13.20 d. $19.79

A

Which of the following forms of I.D. is not an acceptable form of I.D. for opening a savings account? a. Library card b. Driver's license c. Passport d. Military I.D. card

A

Why are the premiums for a PPO health insurance plan generally more expensive than those for an HMO Health Insurance Plan? a. PPO insurance plans offer a wider choice of primary care doctors and specialists. b. HMO insurance plans have higher deductibles and copays. c. PPO insurance plans have higher deductibles and copays. d. HMO insurance plans require a referral for a patient to visit a specialist.

A

Why does the FDIC place a limit on the amount of money it will insure? a. The FDIC has only limited reserves. b. Limiting the amount of money insured encourages people with a large amount of money to spread their money out among different banks, which stimulates the economy. c. The FDIC believes that insuring too much money encourages reckless investing. d. The limit prevents the money used to replace lost deposits from being taxed.

A

If the lowest price in the past year occurred 48 days ago, find the approximate average change per day since then. a. $4.74 b. $0.72 c. $0.49 d. $1.34

B

In order to lower his monthly auto insurance bill, Henry has decided to change his existing policy by increasing the deductible for both collision and comprehensive insurance to the highest amount permitted by his insurance company, AA Auto Insurance. His current monthly auto insurance bill, which includes a $250.00 deductible for collision and a $50.00 deductible for comprehensive, is $43.79. How will Henry's monthly auto insurance bill be affected by the change?

A. $12.48

If monthly payments are made for 30 years, find the value for n in the following future value ordinary annuity formula.

A. (360)

List 3 things that you should consider when choosing a career.

Amount of education, salary, personal interests

Limited mobility may be a disadvantage of buying because the home is _____. a. difficult to get around in b. difficult to sell c. expensive to repair d. far away from work

B

A new DVD player has a purchase price of $430. With the extended warranty, the total cost is $512. What percent of the purchase price is the price of the warranty? a. 16% b. 19% c. 24% d. 29%

B

Below is a graph of the Murphys' annual expenses. How much will the Murphys' pay in state/local taxes if their gross annual household income is $85,420? a. $3,559.17 b. $8542.00 c. $20,500.80 d. $29,897.00

B

Bob gets paid an annual salary of $30,000 and earns 5% commission on all sales he makes. If Bob wants to make $6,000 this month, how much in sales does he need to have? a. $50,000 b. $70,000 c. $90,000 d. $120,000

B

Enter the following transactions into Richard's checkbook register and state his ending balance: Date Type Description Amount 03/01 Check #204 Blue Sky Apartments $455.00 03/05 DEP Payroll automatic deposit $390.36 03/08 Debit Benny's Hamburgers and Fries $9.20 03/15 Check #205 Car payment $251.59 03/19 DEP Payroll automatic deposit $390.36 a. $715.79 b. $1,009.81 c. $780.72 d. $880.24

B

Eva is 29 years old and has 2 children, ages 3 and 5. She makes $48,500 a year. Eva decides to buy a $400,000 10-year term policy and then renew the policy for another ten years afterwards. To renew the policy the insurance company charges an extra 40% to her premium rate. Given the options below, assess whether Eva made a wise decision.

B

Fees paid at the time of a home loan transaction between the buyer, seller and lender are called _____. a. application costs b. closing costs c. lending costs d. purchase costs

B

If you want to increase the amount of monthly savings in your budget, which of the following methods would reasonably be the most effective? a. Keep "Essential Expenses (Fixed)" the same amount every time the budget is revised. b. Determine a "Non-Essential Expense", or any other expense, that can be reduced. c. Pay bills as late as possible, in order to increase the amount of cash available. d. Use only money from the emergency savings for unexpected expenses.

B

In an effort to reduce cost on auto insurance, Sophia has lowered each component of her current plan to the cheapest possible option. Sophia's current insurance agency is Fret-No-More Auto Insurance, whose policy options are listed below. The annual premium for Sophia's current policy is $511.31. What decrease in her annual premium will Sophia see after the change?

B

In auto insurance, a higher deductible means the customer _____. a. has a higher monthly bill, but pays less out of pocket in the event of an accident. b. has a lower monthly bill, but pays more out of pocket in the event of an accident. c. has a higher monthly bill and pays more out of pocket in the event of an accident. d. has a lower monthly bill and pays less out of pocket in the event of an accident.

B

In many cases, lenders allow homeowners to include their homeowners insurance premium with their monthly mortgage payment. Tim's home is worth $279,500. If his homeowners insurance premium is $0.33 per $100, how much is added to his monthly mortgage payment for insurance? a. $7.69 b. $76.86 c. $92.35 d. $922.35

B

Peter and Marcia, both age 34, can pay $650 a year each on life insurance. About how much is the face value of the largest combination of policies they can buy without spending more than a combined $1,300 annually?

B

Prince Waste Collection pays a yearly dividend of $14.94 per share of stock. If Prince Waste Collection pays Kathy $46,926.54 in dividends every year, how many shares does Kathy own? a. 2,978 b. 3,141 c. 3,443 d. 2,934

B

Sally must have a total of $2,250 to move in to her new apartment which includes first month's rent, last month's rent, a pet deposit and a security deposit. If the pet deposit is $150 and the security deposit is $750, how much is her rent each month? a. $650 b. $675 c. $750 d. $1,050

B

Shawnee is putting $3,500 into an account earning 4.85% interest compounded quarterly. She estimates that it will take just over 11 years for this investment to grow to $6,000. Which of the following is a true statement? a. Shawnee's estimate of the time is too low. b. Shawnee's estimate of the time is correct. c. Shawnee's estimate of the time is too high. d. Shawnee does not have enough information to estimate the time.

B

The extended warranty on a ceiling fan is 18% of the purchase price. If the price of the fan is $140, how much is the warranty? a. $7.78 b. $25.20 c. $18.72 d. $12.86

B

Using the following prices, calculate the unit price to determine how much it would cost for 5 containers of yogurt and 3 containers of applesauce. $4.29 for 6 containers of yogurt $3.39 for 8 containers of applesauce a. $4.39 b. $4.85 c. $6.41 d. $7.68

B

Which items listed on the ledger represent credits? a. Credit bill and craft fair b. Gift and online auction c. Gift and insurance payment d. Online auction and craft fair

B

Which of the following employees has the greatest total employee compensation? a. Employee A: total job benefits $68,100 and total job expenses $100 b. Employee B: total job benefits $68,400 and total job expenses $300 c. Employee C: total job benefits $68,700 and total job expenses $800 d. Employee D: total job benefits $69,000 and total job expenses $1,000

B

Which of the following expressions is equal to the total proceeds of a mutual fund? a. net assets times number of shares b. net asset value times number of shares c. offer price times number of shares d. profit minus investment

B

Which of the following expressions represents the total earnings of a commissioned employee earning 9.5% commission with sales of $8,540? a. (0.0095)(8,540) b. (0.095)(8,540) c. (0.95)(8,540) d. (9.5)(8,540)

B

Which of the following is least likely to be kept as part of one's financial records? a. A receipt for a dishwasher. b. A receipt for groceries. c. A receipt for taxes paid. d. A receipt for insurance.

B

If quarterly payments are made for 15 years, find the value for n in the following present value ordinary annuity formula.

B. (60)

Alissa would like to make a deposit into her savings account. She filled out a deposit ticket and handed it to the teller at her bank. The teller apologizes to Alissa and explains that she cannot accept the deposit ticket in its current form. Determine what, if anything, Alissa will have to change in order for her deposit ticket to be accepted. a. The sub total is calculated incorrectly b. Alissa forgot to sign the deposit ticket for less cash back c. The total is calculated incorrectly d. Alissa forgot to date the deposit ticket

C

An appliance store is having a liquidation where everything in the store is 70% off the regular price. What is the price of a dishwasher that is regularly $519.89? a. $36.39 b. $70.00 c. $155.97 d. $363.92

C

An investment of $2,000 is earning interest at the rate of 6.2% compounded quarterly over 5 years. Approximately how much interest is earned on the investment? a. $724.67 b. $2127.72 c. $720.37 d. $2720.37

C

Angelo, age 40, is comparing the premium for a $125,000 whole life insurance policy he may take now and the premium for the same policy taken out at age 45. Using the table, find the difference in total premium costs over 20 years for this policy at the two age levels.

C

Ann needs to have money available to pay an annual renters insurance premium of $224, ten months from now. She has savings of $0 in her current budget, a retirement fund of $4,833, and a reserve fund of $0. Which of the following would NOT be part of her reasonable plan to establish a reserve fund for this expense? a. Reduce a non-essential expense to save money. b. Establish a savings account for Other Expenses. c. Pay the premium right away using the retirement fund investments. d. Divide it into a monthly savings amount, and add the savings to the budget.

C

Dominic is looking over his spending pattern for the past week to try to determine how much money he had on Sunday. This is Dominic's spending pattern: If the bank charges Dominic an overdraft fee of $25 every time he overdraws his account, and Dominic overdrew his account on Thursday but not on Saturday, which of the following is a possible amount of money that Dominic could have had in his account last Sunday? Assume that the only debits and credits not listed are overdraft fees. a. $500 b. $480 c. $435 d. $400

C

Gareth has $2,000 to invest. Putting the money in a savings account at his local bank will earn him 2.2% annual interest and gives him the ability to make ATM withdrawals from that bank's ATMs. Putting the money in an online savings account will earn him 4.85% annual interest, but he will be charged $3 every time he makes an ATM withdrawal. Assuming that Gareth's ATM withdrawals do not affect the amount of interest he earns, roughly how many ATM withdrawals must Gareth make every year for the local savings account to be a better deal than the online savings account? a. 8 b. 14 c. 18 d. 25

C

If an item tends to be very expensive to repair, how might that affect your decision to purchase a warranty for it? a. If an item is very expensive to repair, it is probably easier to buy a new one than to repair it, so a warranty is probably not worth it. b. The price of a warranty is based on the price of the repairs, so a warranty might not be a good idea. c. Buying an extended warranty might be a good idea so that you do not have to repair the item yourself. d. Buying a limited warranty might be a good idea because limited warranties sometimes do not deal with repairs, meaning that you will not have to handle these expensive repairs.

C

If the NCUA charges 6.3 cents per 100 dollars insured and Credit Union L pays $8,445 in NCUA insurance premiums, approximately how much is in Credit Union L's insured deposits? a. $1.2 million b. $5.3 million c. $13.4 million d. $20.6 million

C

If the purchase price for a house is $309,900, what is the monthly payment if you put 20% down for a 30 year loan with a fixed rate of 6%? a. $729.98 b. $912.48 c. $1,486.41 d. $1,858.01

C

Planning for the possibility that the plumbing in your house needs repair is part of a plan for _____. a. financing b. managing income c. managing liquidity d. protecting assets

C

Rank the 1040 forms in order from simplest to most complex. a. 1040-A, 1040-EZ, 1040 b. 1040-EZ, 1040, 1040-A c. 1040-EZ, 1040-A, 1040 d. 1040, 1040-EZ, 1040-A

C

Rex has several hundred thousand dollars to save, and he wants to keep it as safe as possible. What would you recommend Rex do to keep his money safe? a. Deposit the money in a bank, ideally in a single well-protected account. b. Deposit the money in a bank, but in several different accounts. c. Deposit the money in several banks, not putting too much money in any one. d. Keep the physical cash at home in a fireproof safe.

C

Trevor buys 80 shares of Upton Group and 70 shares of TJH Small-Cap. What is Trevor's total investment? a. $2,687.90 b. $2,768.00 c. $2,850.30 d. $2,957.60

C

Using mental math, the approximate tip to leave for a bill of $81.79, if you tip 15% would be _____.. a. $8.20 b. $10.30 c. $12.30 d. $16.40

C

Matthew bought 4 new compact discs at $16.99 each and a carrying case for $35.89. He paid 8.75% sales tax on his purchases. If Matthew paid $112.42 total, determine if he paid the correct amount. a. Matthew paid $0.15 too little for his purchases. b. Matthew paid $0.16 too much for his purchases. c. Matthew paid $0.05 too much for his purchases. d. Matthew paid the correct amount for his purchases.

D

Robert makes $951 gross income per week and keeps $762 of it after tax withholding. How many allowances has Robert claimed?

D

The extended warranty on a $960 dishwasher is 21% of the purchase price and lasts for eight years. What is the effective cost per year of the extended warranty? a. $28.80 b. $45.20 c. $23.78 d. $25.20

D

The same amount of principal is invested in different accounts earning the same interest rate. Which of the following accounts would have the greatest accumulated value at the end of one year? a. An account earning no interest b. An account earning simple interest c. An account earning interest compounded annually d. An account earning interest compounded daily

D

Tina lives in a state that charges her 4.5% state income tax on her federal taxable income. If her federal taxable income is $61,600, how much does Tina pay in state income tax? a. $1,545 b. $227 c. $4,372 d. $2,772

D

Wayne is planning to sell the twenty-room apartment building he bought fifteen years ago, for which he paid $759,000. The real estate market in his area has been falling since that time, and the property has decreased in value by 3.8% every year. Wayne rents each of his apartments for $495 per month, and upkeep on the building costs him $26,400 annually. Assuming that Wayne has kept his apartment complex constantly three-quarters full, what will his net profit or loss be when he sells the building, to the nearest hundred dollars? a. $61,500 loss b. $722,400 loss c. $168,000 profit d. $606,000 profit

D

What does "FDIC" stand for? a. Financial Deposit Institute of Congress b. Financial Deposit Insurance Commission c. Federal Deposit Investigation Council d. Federal Deposit Insurance Corporation

D

What does PIN stand for? a. Principal Investment Number b. Permission Initiating Number c. Percent Increase Number d. Personal Identification Number

D

Which of the following expressions shows how to calculate the unit price for a 28 ounce jar of spaghetti sauce priced at $2.89?

D

Which of the following is an advantage of renting? a. ease of mobility b. economic gain c. financial risk d. tax savings

D

Which of these can be considered "online banking?" I. A brick-and-mortar bank that allows its customers to transfer money online. II. A bank that has only a few branches but has customers depositing money online. III. A bank that does not exist as a real building, but only has an internet presence. a. I and II b. II and III c. III only d. I, II, and III

D

Which of these is not a disadvantage to writing checks. A. The account information given on the check can cause security issues. B. There are postage costs associated with mailing checks. C. There is a risk of overdrawing if one doesn't track their balance. D. Many companies do not accept checks.

D

Why are closing costs a one time fee? a. Payment of closing costs is required because it is a sign to the lending institution that the investor has every intention of making payments on time. b. If closing costs were paid over time, they would most likely be forgotten and never paid off. c. Most home buyers pay for their houses in full, and consequently pay for the closing costs in full as well. d. The closing costs cover titles, taxes, and realtor costs. After closing, the only monetary obligation is to the lending party.

D

Why is simple interest useful for planning parts of your financial future? a. Simple interest can endure unforeseen economic changes by fluctuating. b. Simple interest generates more money than any other source of income. c. Simple interest grows more quickly if you invest in it longer. d. Simple interest is very regular and can be calculated in advance.

D

Your children are 3 and 5 years old now, and you want an inexpensive policy that covers your family at least until the youngest is 22. Based on the given information, what is the best policy to buy? a. Whole life policy b. 10-year term policy c. 15-year term policy d. 20-year term policy

D

A commission employee derives their income from the number of items or goods that they produce.

False

If your expenses are more than your income, then you have a positive net cash flow.

False

There is a negative correlation between the number of years in college and earnings.

False

Leroy's total employee compensation was $50,150 last year. His total job expenses for traveling and for professional developement for the year were $3,500. Which of the following represents his total job benefits? a. $53,650 b. $50,150 c. $46,650 d. $47,650

A

On average 113,204 aluminum cans are recycled in a minute. Approximately how many cans will be recycled in 16 days? (Express your answer in scientific notation.)

A

Trent is 25 years old and works for a company that matches his 401(k) contribution up to 5%. The interest rate for his 401(k) is 7.3%. If he puts away 10% of his $32,000 salary every year, how much would he have saved in 10 years? Round your answer to the nearest cent. a. $67,266.16 b. $72,176.59 c. $33,250.60 d. $35,677.89

A

Your broker charges a commission of 5.1% of the cost of the stock you sell. If you sell a batch of stocks worth $2,617.75, how much commission will you owe your broker? a. $133.51 b. $513.28 c. $110.56 d. $392.66

A

Determine the total annual FICA tax for an annual salary of $165,000. Use $106,800 for maximum taxable earnings. a. $901.41 b. $9,014.10 c. $1,262.25 d. $12,622.50

B

Edward purchased his home for $89,000. For the first three years after he moved in, the real estate market was very lively, so his property value grew by 4.8% every year. For the next five years, the market slowed down somewhat, and his property value grew by 2.6% every year. How much had the value of Edward's home increased after eight years, to the nearest hundred dollars? a. $25,700 b. $27,500 c. $30,000 d. $13,200

B

Vicki works 19 hours per week. Her take home pay is $17.30 per hour. If Vicki is able to save all of her earnings, how long will it take her to save at least $4,000? a. 12 weeks b. 13 weeks c. 14 weeks d. 15 weeks

B

Which of the following statements about EnergyStar washing machines and dryers is false? a. EnergyStar washers and dryers consume 30 to 40 percent less energy per load. b. EnergyStar top-loading washers use less water than front-loading washers. c. EnergyStar washers spin-dry laundry, which reduces dryer usage. d. EnergyStar washers and dryers have less tear and wear on laundry.

B

Yolanda used a reconciliation worksheet provided by her bank. Line 5 should equal line 6 at the end of the reconciliation, but it does not. Yolanda wants to first look for a single transaction that could have caused this problem with reconciliation. What is the amount of the transaction that Yolanda should look for in order to find a solution to the problem? a. $17.52 b. $19.99 c. $20.01 d. $37.51

B

Broker P charges a commission of $8.50 for every ten shares of stock, and Broker Q charges a fee of $65.00 for every thousand dollars bought or sold. If stock in Ergar Appliances costs $18.75 per share and you buy 500 shares, which broker is the better deal, and by how much? a. Broker Q will charge $375.35 less than Broker P. b. Broker Q will charge $160.22 less than Broker P. c. Broker P will charge $184.38 less than Broker Q. d. Broker P will charge $425.00 less than Broker Q.

C

Buying a car is an example of _____. a. An immediate goal b. A long term goal c. A short term goal d. A liquid goal

C

Chuy wants to buy a new television. The television costs $1,350. Chuy decides to save the same amount of money each week, for 27 weeks. After 8 weeks Chuy saved $440. Which of the following conclusions can you make about Chuy's plan? a. Chuy has a good plan and will have exactly $1,350 saved at the end of 27 weeks. b. Chuy must increase the amount he saves each week in order to meet his goal at the end of 27 weeks. c. Chuy will save more than he needs and will meet his goal in less than 27 weeks. d. There is not enough information given to make a conclusion about Chuy's plan.

C

If you invest $3,900 at a 7.83% simple annual interest rate, approximately how long will it take for you to have a total of $10,000? a. 12 years b. 15 years c. 20 years d. 30 years

C

Jim wants to start investing in bonds. He checks with two brokers to ask them for suggestions of bonds to buy. Broker J, who charges a commission of 3.6% of the market value of all bonds sold, recommends for Jim to buy three par value $500 bonds from the city of Danville, a par value $1,000 bond from Raxin Accounting, and two par value $1,000 bonds from United Rotators. Danville bonds are selling at 114.212, Raxin Accounting bonds are selling at 79.941, and United Rotators bonds are selling at 102.844. Broker K, who charges a fee of $28 for each bond sold, recommends that Jim buy five par value $500 bonds from Fort Bend County, a par value $1,000 bond from the U.S. Treasury, and two par value $500 bonds from Iwad Records. Fort Bend bonds are selling at 91.090, Treasury bonds are selling at 101.163, and Iwad Records bonds are selling at 107.252. Based on the current information, which broker's bond package will cost Jim less money up front, and how much less will it cost him? a. Broker J's suggestion will cost Jim $59.57 less than Broker K's suggestion. b. Broker J's suggestion will cost Jim $62.00 less than Broker K's suggestion. c. Broker K's suggestion will cost Jim $148.57 less than Broker J's suggestion. d. Broker K's suggestion will cost Jim $208.07 less than Broker J's suggestion.

C

Leroux Health Insurance is considering changing the options in one of their health care plans (Plan A) based on customer feedback that prescriptions and regular visits to the doctor are too expensive for the insured individual. How can Leroux reduce the costs of regular health care without driving up the price of their health care plan?

C

Luis makes $23.10 per hour at his job for the first 40 hours he works each week. If he works more than 40 hours, then Luis makes $34.65 per hour. If Luis works 46 hours in one week, how much does he earn? a. $1,062.60 b. $1,097.25 c. $1,131.90 d. $1,593.90

C

Macky wants to open a checking account. He is examining different banks and banking accounts. Then he will choose a bank account for his needs. Which of the following statements should not be one of Macky's reasons for choosing a bank? a. Being more informed leads to being better prepared to make financial decisions. b. Banks could have charges that Macky does not know about until reading carefully. c. The first bank Macky considered offered a chance to win a prize upon opening an account. d. He will become more aware of how well banks meet his particular needs.

C

Mrs. Torres goes out of town on a business trip. She spends 3 nights in a hotel at a charge of $80 per night. She pays 9% tax on the room and tips the maid service 10% of the room charge. Mrs. Torres also has meals worth $109.30 before tax and she tips 15%. If the total cost of her trip is $420.04, approximately what tax rate does Mrs. Torres pay on her meals? a. 6% b. 7% c. 8% d. 9%

C

Ross purchases 3 cookbooks for $18.89 each, a set of measuring cups for $2.68, 4 kitchen utensils for $5.35 each and a cooling rack for $9.60. Ross uses a promotional discount of $5 off on the purchase of 3 or more cookbooks. There are no taxes charged on his purchase, but shipping charges are based on the following table: Ross selects standard shipping and is billed $94.35 for the total of the online purchase. Determine if Ross has been billed correctly for his purchase. a. Ross has been billed correctly. b. Ross has not been charged enough for his purchase. c. Ross has been over charged by $3.75 for his purchase. d. Ross has been over charged by $4.25 for his purchase.

C

Sally has just finished her thirty-fifth year with her company and is getting ready to retire. During her thirty-five years, Sally's average annual salary was $45,603. How much can Sally expect to receive from Social Security annually if she were to retire today? (Assume she will receive 42% of her average annual salary.) a. $191.53 b. $1,915.33 c. $19,153.26 d. $191,532.60

C

Sandra owns a bond issued by Animite Energy with a par value of $1,000. The bond pays 7.6% interest yearly and had a market rate of 93.411 when Sandra bought it. If the current market rate of Animite Energy bonds is 102.382, what is the current yield on Sandra's bond? a. 0.076 b. 0.074 c. 0.081 d. 0.089

C

Sienna wants to set up a special fund so she can save to buy presents for her friends and family throughout the year. If her gift purchases last year totalled $580, estimate how much she should save each month to have approximately the same amount available for gifts next year? a. Approximately $480 b. Approximately $58 c. Approximately $48 . d. Approximately $96

C

Stock in Trochel Office Supplies trades at $72.40 per share and pays a yearly dividend of $6.92 per share. If David owns stock in Trochel Office Supplies worth $6,443.60, how much does he get paid in yearly dividends? a. $678.16 b. $931.16 c. $615.88 d. $560.52

C

The table below shows the earnings, in thousands of dollars, for three different commissioned employees. $2,000 + 3% on all sales 7% on all sales 5% on the first $40,000 + 8% on anything over $40,000 December 4.4 5.6 5.2 January 3.5 3.85 3.6 February 4.7 4.9 4.4 Who had the largest dollar amount in sales for the month of January? a. The salary plus commission employee. b. The straight commission employee. c. The graduated commission employee. d. They each had the same dollar amount in sales.

C

Two friends decide to rent an apartment and split the cost evenly. They each paid $575 towards the total move in cost of first and last month's rent and a security deposit. If the apartment cost $325 per month to rent, how much was the security deposit? a. $125 b. $250 c. $500 d. $825

C

Which of the following companies offers the greatest total employment compensation? Company A Company B Company C Company D Gross Pay $37,600 $36,800 $38,100 $39,000 Paid insurance $2,800 $2,400 $2,100 $1,800 Paid time off $3,100 $3,600 $2,900 $2,500 Job expenses $1,200 $600 $300 $800 a. Company A b. Company B c. Company C d. Company D

C

Which of the following government agencies does not regulate banking or financial markets? a. The NCUA b. The Federal Reserve c. The FCC d. The OCC

C

Which of the following is a cost homeowners insurance does not protect? a. The cost of repair or replacement of a home lost in a natural disaster. b. Additional living expenses required while your home is repaired after a disaster. c. Replacement costs for all contents in your home, including high cost electronics. d. The cost of medical expenses incurred by somebody getting injured on your property.

C

Which of the following is most likely used by a seller to target an impulse buyer? a. contest b. coupon c. display d. rebate

C

Without buying points, a monthly mortgage payment will be $958. Buying 1 point at closing would reduce the payment to $948.75. If each point costs $1000.00, rounded to the nearest year, how long would it take to break even by buying 1 point? a. 7 years b. 8 years c. 9 years d. 10 years

C

Assume that you pay $2,849.84 in state property taxes every year. If your property has an assessed value of $41,302, what is your state's property tax rate? a. 0.077 b. 0.032 c. 0.014 d. 0.069

D

Four different stores have the same digital camera on sale. The original price and discounts offered by each store are listed below. Rank the stores from the cheapest to most expensive sale price of the camera. Store A: price $99.99 and discount of 15% Store B: price $95.99 and discount of 12% Store C: price $90.99 and discount of 10% Store D: price $89.99 and successive discounts of 5% and 5% a. A, B, C. D b. A, B, D, C c. D, A, B, C d. D, C, B, A

D

The Changs updated their bedroom by purchasing a new lamp for $89.95 and a comforter set for $239.99. They paid .066% sales tax on their purchases. If the Changs paid $351.72 total, determine if they paid the correct amount. a. The Changs family paid $0.33 too much for their purchases. b. The Changs family paid $0.99 too much for their purchases. c. The Changs family paid $5.94 too much for their purchases. d. The Changs family paid the correct amount for their purchases.

D

Which of the following ratios is used to determine ones debt-to-income ratio? a. 20/28 b. 20/36 c. 28/30 d. 28/36

D

Which of the following should not be used as a guideline for making a purchase? a. You budgeted for it. b. You can afford it. c. You need it. d. You want it.

D

Which of the following should one consider when choosing a career? a. the potential earnings b. the work environment c. the required education d. all of the above

D

Which of the following statements explains the relationship between Social Security and Medicare taxes? a. Both Social Security and Medicare are applied to all wages up to the maximum taxable earnings. b. Both Social Security and Medicare are applied to all wages without limit. c. Medicare is applied to all wages up to the maximum taxable earnings. Social Security is applied to all wages without limit. d. Social Security is applied to all wages up to the maximum taxable earnings. Medicare is applied to all wages without limit.

D

Which of the following statements is true. I. The higher your interest rate, the higher your monthly mortgage payments. II. The higher your down payment, the higher your monthly mortgage payments. III. A 30 year mortgage fixed at 6% will have smaller payments that a 20 year mortgage fixed at 6%. a. I only b. II only c. I, II, and III d. I and III

D

Which of the following will not help Robert lower his homeowners insurance premium? a. Increase the deductible on his policy. b. Remove replacement cost from his policy. c. Reduce the number of riders on his policy. d. Increase the total coverage of his home on his policy.

D