Study Cumulative Exam - Financial Math
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
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.
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
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
The Murphys' gross annual family income is $120,500. Mr. Murphy referred to the graph shown below and calculated that his family will spend $28,920 on taxes this year. What is wrong with Mr. Murphy's calculation?
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
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
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
Fran brings home $225 per week working 15 hours of which she is able to save $40. Fran wants to have $1,400 saved at the end of 20 weeks. She may work up to 18 hours per week if she wants. She can save all of the money earned working the extra hours. Which of the following statements is true?
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.
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
Which of the following companies offers the greatest total employment compensation?
B
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
Zalia meets her friend at the science museum to see a special exhibition. The admission to the museum is $12.50 per person 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?
B
Ken, a single taxpayer, has a gross income of $79,685. He claims one exemption and can take a deduction of $1,257 for medical expenses, a deduction of $2,181 for interest on his mortgage, an adjustment of $800 for alimony, a deduction of $1,419 for property taxes, an adjustment of $1,722 for business expenses, and an adjustment of $2,511 for contributions to his retirement fund. The standard deduction for a single filer is $5,700, and exemptions are worth $3,650 apiece. Using the table below, how much does Ken owe in income tax?
C
A lender estimates the closing costs on a home loan of $50,000 as listed below. Closing Cost Charge Loan origination $200 Title insurance $530 Attorney's fees $600 Appraisal $265 Inspection $575 Recording fees $130 Escrow $800 If the lender's good faith estimates are accurate, are they a reasonable amount for closing costs? Why or why not?
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 $123.35 for the airline ticket and taxi, at what percent of his fare did Clovis tip the taxi driver?
C
Dominic is looking over his spending pattern for the past week to try to determine how much money he had on Sunday. This is Dominic's spending pattern: Day Debit ($) Credit ($) Monday 158 --- Tuesday 69 44 Wednesday 175 --- Thursday 131 38 Friday --- 53 Saturday 22 14 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.
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?
C
Henry is moving and needs to open a new checking account. He is trying to decide between three banks using the chart below: Bank X Bank Y Bank Z No monthly fees if balance stays above $500, otherwise $7 per month No monthly fees if check card is used less than 6 times per month $5 monthly fee No minimum balance $25 minimum balance No minimum balance Online banking services Online banking services Online banking services Non-Bank X ATM fee - $2.00 per transaction Non-Bank Y ATM fee - $1.50 per transaction Non-Bank Z ATM fee - $2.00 per transaction Henry usually has about $300 in his account at any given time during the month. He limits his ATM visits to one per week and is interested in banking online options. Bank X and Bank Z have 5 ATMs within a 5 mile radius of Henry's work and his new home. Which bank should he choose?
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?
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, and he would still need to pay his first month's rent on top of these move-in costs. To the nearest dollar, what is the maximum amount of monthly rent payment he could pay?
C
Over the period of a year, Sam's net worth increased. Which of the following could be true?
C
Rogério, a graphic artist, after paying all the expenses in his monthly budget, has a monthly net cash flow of $248. He has decided to add monthly savings to his budget in order to cover his health insurance co-pays and other expenses that come at odd times as listed below:
C
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.
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
The Roth family has liquid assets of $10,000, use assets of $150,000 and investment assets of $34,000. They also have liabilities totaling $108,000. If their total liabilities increase by $7,000 over the next year, by how much would the Roth family need to increase their assets in order to have a net worth of $100,000?
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?
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?
C
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.
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
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?
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.
D
Luis has a biweekly gross pay of $770 and claims 2 federal withholding allowances. Luis has all of the following deductions from his gross pay: federal tax from the following table Social Security tax that is 6.2% of his gross pay Medicare tax that is 1.45% of his gross pay state tax that is 19% of his federal tax Determine how Luis' net pay will be affected if he increases his federal withholding allowances from 2 to 3.
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?
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.
D
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?
D
Consider today's stock listing for Rayje Clothiers, shown below. 52 wk High 52 wk Low Symbol Div. Close Net Change 225.80 169.96 RAJ 25.10 200.43 13.74 Today, you sold the 459 shares of Rayje Clothiers that you purchased yesterday. How much profit did you make?
D
Determine the total annual FICA tax for an annual salary of $38,480.
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.
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?
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%
D
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?
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?
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?
D
Nellie is buying bird seed to put in her bird feeders. She uses about 10 pounds of bird seed each week, but has room to store any extra that she purchases.The bird seed comes in 3 different sizes as given below: 3.5 pounds for $2.52 7.5 pounds for $5.40 11 pounds for $7.92 Nellie is trying to be a smart shopper and get the best deal on the bird seed. Which size bag of bird seed should Nellie buy?
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?
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.
D
Which of the following companies offers the greatest total employment compensation?
D
Which of the following statements accurately describes the result of a decreasing worker-per-beneficiary ratio in the Social Security system?
D
I hope this helped! :)
Try to work out some if you have the time! Next time you get the chance study! It'll help you more in the long run if you actually decide to be in business and financing!
