personal finance final review

Maximization of return in the next five to ten years is the goal of which investment strategy?

strategic investing

this non-for-profit organization has the largest consumer testing facility in the world and publishes a popular magazine, Consumer Reports, that gives test results and product ratings

the Consumers Union

which of the following is NOT part of the 1962 Consumer Bill of Rights

the right to low prices

FICA also means the same as Social Security, that is withheld from each of your paychecks

true

Factories begin laying off workers during the decline period of the business cycle.

true

Federal Income Tax and State Tax are withheld from each of your paycheck, as required by law

true

examples of employee expenses include parking costs and buying uniforms

true

financial goals should be specific, measurable, and realistic

true

you sometimes must give up one thing to get another because your resources are limited

true

Jerry needs some quick cash and decides to pawn his diamond ring, which is appraised at $750. The pawnbroker agrees to give Jerry a loan for 15 percent of the ring's appraised value. What is the amount of the loan the pawnbroker made to Jerry?

$112.50

Tommy wants to buy a new bicycle, which costs $150. His parents have promised to contribute one-fourth of the cost of the bike. The rest will have to come out of Tommy's savings. What amount will Tommy need to come up with to get the new bike?

$112.50

Sally borrows $250 and will pay interest at an annual rate of 12 percent. If the loan is to be paid back in six months, what is the dollar cost of the interest on this loan?

$15

Jack and Diane are setting up a credit payment plan. They have disposable income of $250/month with which to pay credit card bills. The minimum monthly payments for their bills are as follows: Credit card 1: $50 Credit card 2: $60 Credit card 3: $20 Credit card 4: $15 Suppose credit card 1 is the highest priority. What should their monthly payment be on this card?

$155

John and Marissa purchase their first home for $120,000. They must put 15 percent down on the purchase price as a down payment. What will the amount of the down payment be?

$18,000

last year, Dan and Paula regularly invested $25/week in a mutual fund account. this year, they increased their weekly investment by 10 percent. what amount did they invest in the account over the past two years?

$2,730

Donna's assets are $4,500; her liabilities are $1,750. Find Donna's capital.

$2,750

Lauren rides the bus to and from work every day; bus fare is 75 cents per trip. she also buys lunch in the cafeteria for $3.00 each day. if she works five days per week, what are her weekly expenses?

$22.50

Mackenzie wants to purchase a new sofa for $900. Her brother tells her that if she can come up with 75% of the purchase price, he will lend her the rest of the amount. If Mackenzie produces the required amount, what will be the amount of the loan she receives from her brother?

$225

Yuri's credit account has a monthly interest rate of 1.5%. His previous balance was $500 and he paid $300. What will the finance charges be if the creditor uses the adjusted balance method?

$3

The annual interest rate is 12 percent. The borrower paid a total of $720 in interest and repaid the loan in 24 months. What was the principal?

$3,000

Kimberlee's take-home pay is 70 percent of her gross pay. Her annual salary is $60,000. Use the 20/10 Rule to determine her maximum monthly credit payments.

$350

the average daily balance on your credit card statement this month is $300. If the annual finance charge on your account is 18 percent, what will the finance charge be on your statement this month?

$354

Tyler hires a credit guard service to monitor his credit files. He pays a $100 fee to subscribe to the service, plus a $25 monthly fee. He can request one free copy of his credit report each year; additional copies are $10 each. In the first year, Tyler requested three copies of his credit report. What was the total amount of fees Tyler paid the credit guard service during the first year?

$420

Suppose you deposit $50 into a savings account that pays 6% interest. Interest is compounded annually. After three years, how much will you have in the account (assume that you make no further deposits or withdrawals).

$59.55

A local furniture store hires Vinnie's Creditor Services to collect a debt from Alice, who has stopped making payments on bedroom furniture she purchased several months ago. Alice still owes the store $1,500. If Vinnie collects the debt, his fee will be 40 percent of the amount collected. How much will Vinnie earn if he collects the entire debt from Alice?

$600.

mia takes out a 12-month loan at her credit union for $750, payable in twelve equal monthly installments. the annual interest rate for the loan is 8 percent. what are the monthly payments of this loan?

$67.50

Ahmed's take-home pay is 75 percent of his gross pay. His annual salary is $50,000. Use the 20/10 Rule to determine his maximum borrowing.

$7,500

Paolo is paying off a credit card with a current balance of $450. The interest rate on the card is 23%. The minimum monthly payment is $25, but he plans to make monthly payments of $45. He will not be using the card to accumulate further debt. Approximately how many months will it take to pay off the balance?

11

you have $3,000 and want to double it in 5 years. what rate of return must your investment earn to achieve your goal?

14.4%

Calculate the approximate APR to two decimal places using the following information: Number of payment periods in one year: 12 Finance charge: $72 Principal: $900 Total number of payments to pay off loan: 12

14.77%

When it comes to managing money, success is about _____% knowledge and _________% behavior.

20, 80

A skateboard costs $72.80 this year. Suppose it cost just $70 last year. What is the inflation rate on the skateboard?

4%

there are 2,000 registered nurses working in Dakota County; 550 of them work at nursing homes throughout the country. what percentage of registered nurses in Dakota County work at nursing homes?

72.5%

On January 30, 2009, your parents lent you $400. On January 30, 2010, you repaid the loan by writing your parents a check for $432. What was the annual interest rate your parents charged you for that loan?

8%

you are earning 8% on your investment. how many years will it take for you to double your money?

9 years

This law allows people who leave employment to continue their health insurance under the company plan for a limited period of time

COBRA

a preferred provider organization is

a group of health care providers who join together to provide health services for set fees

which of the following is typically the first stage of investing?

a put- and -take account

the maximum duration of benefits under most disability policies is until

age 65

money paid by one former spouse to support the other is called

alimony

your financial position is based on your

capital

Professional investment planners who are trained to give investment advice based on your goals, age, lifestyle and other factors are called...

certified financial planners

people are buying more products that are ecologically safe, recyclable and organic. this is mostly an example of how _____________ influences personal buying decisions

concern for the environment

which of the following types of bonds cannot be purchased through TreasuryDirect?

corporate bonds

debt is the granting of a loan and the creation of a debt; any form of deferred payment

false

learning the language of money is not that important because you will be able to depend on financial planners to manage your money

false

once you graduate and get a good job, you should never need to take another class

false

the general sales tax amount in Indiana is 9%

false

when a bill is paid within fifteen days of its due date, this is considered an automatic grace period

false

you can comparison shop for goods such as furniture and appliances, but comparison shopping for credit can ruin your credit rating

false

The total dollar amount of all interest and fees you pay for the use of credit is called the

finance charge

a professional mutual fund manager can do all of the following except

guarantee a profit for the investors

new ideas, products, or services that bring about changes in the way we live are called

innovations

which of the following is the first step most people take to establish a good credit record?

open a savings account

the right, but not the obligation, to buy or sell a commodity or stock for a specified price within a specific time period is called a(n)

option

a request for consumers to return defective products to the manufacturer for a refund or repair is called a

recall

the cost of replacing an item regardless of its actual cash value is called

replacement value

which of the following transactions would likely be difficult to make without a credit card?

reserving a hotel room

the amount of monthly or annual pay that you earn for working is called...

salary

Savings and checking accounts at a credit union are usually called

share accounts

take-home pay is about 70 percent of gross pay. if your annual salary is $40,000, what is your annual take-home pay?

$28,000

Alicia's credit card statement for July read as follows: Previous balance: $547.98 New charges: $238.31 Payments or credits: 299.00 Finance charge: $8.21 What is the new balance on Alicia's credit card statement for July?

$495.50

Cameron takes out a six-month loan at his bank for $500. The annual interest rate for the loan is 8 percent. If Cameron pays back the loan as agreed, what is the total amount (principal plus interest) he will pay the bank?

$520

The annual interest rate on your credit card is 21 percent. What is the monthly rate?

1.75%

Which of the following would be considered the lowest risk investment?

a corporate bond

a service available to charge customers whereby purchases are not billed until much later than the standard billing time is called

deferred billing

credit is a fee payed by a borrower to the lender for the use of borrowed money

false

the first step in career planning is

self-analysis

a Flex 125 Plan allows employees to

set aside money -pretax- to help pay certain medical expenses

the principles by which you live are your

values