FIN112 Quizzes

Which of the following intermediate goals is stated most clearly using the SMART approach?

Purchase a house within the next 5 years with a mortgage no greater than $150,000

A cash advance

Requires you to pay interest every day until you repay the cash advance

The step in the personal financial planning process that follows immediately after the step: "Create and implement your financial action plan" is

Review and revise the financial plan

A loan that must be repaid in total on a specified day, usually within 30 to 90 days, is

Single lump-sum credit.

The opportunity to have another person take over rent payments and live in the rental unit is called (a)

Subletting.

The unit price of a 64-ounce carton of orange juice that costs $3.20 is

$0.05 per ounce.

Janet is completing her federal income taxes for the year and has identified the amounts listed here. How much can she rightfully deduct? AGI: $45,500 Medical and dental expenses: $1,450 State income taxes: $1,350 Mortgage interest: $8,400 Charitable contributions: $1,900

$11,650

A reverse mortgage

Provides older home owners with tax-free income in the form of a loan that is repaid when the home is sold or the home owner dies.

Marcus can afford a monthly mortgage payment of $900. If he is eligible for a 30-year, 5% mortgage (where the mortgage factor is 5.37), how much of a mortgage loan can he afford?

$167,597.77

Randy Hill wants to retire in 20 years with $1,000,000. If he can earn 10% per year on his investments, how much does he need to deposit each year to reach his goal? Round your answer to the nearest dollar.

$17,460

An itemized deduction of $6,800 with a 38 percent tax rate would reduce a person's taxes by:

$2,584.00.

Given the information here, what should Jason's adjusted checkbook balance be? Bank balance:$410 Outstanding checks:$184 Deposit in transit:$94 ATM fees:$37 Interest earned:$5 Checkbook balance:$352

$320

Michele Barbour is considering an additional charitable contribution of $1,150 to a tax-deductible charity, bringing her total itemized deductions to $11,500. If Michelle is in a 28 percent tax bracket, how much will this $1,150 contribution reduce her taxes?

$322

Based on the following information, what amount would be subtracted from the bank balance side of a checking account reconciliation? Service charge $61, Outstanding checks $345, Interest $22, Deposit in transit $970.

$345

Evan had three accounts as listed below. In 2014, how much was his total coverage by the FDIC? Bank A: $80,000 Bank B: $40,000 Bank C: $285,000

$370,000

Using the following table, calculate the taxes for an individual with taxable income of $33,000. 10%Up to $8,800 15%$8,800 − $37,000 25%$37,000 − $86,600 28%$86,600 − $178,900 33%$178,900 − $385,150 35%Over $385,150

$4,510

Using the following table, calculate the taxes for an individual with taxable income of $36,800. 10%Up to $10,100 15%$10,100 − $42,500 25%$42,500 − $99,600 28%$99,600 − $198,400 33%$198,400 − $411,150 35%Over $411,150

$5,015.

George Washburn had earnings from his salary of $51,000, interest on savings of $1,040, a deductable contribution to an IRA of $2,200, and dividends from mutual funds of $710. George's adjusted gross income (AGI) would be

$50,550.

Gwen had three accounts as listed here. In 2014, how much was her total coverage by the FDIC? Bank A: $335,000 Bank B: $105,000 Bank C: $335,000

$605,000

If Jack was in a 25% tax bracket and received a $2,800 tax deduction, by how much would his taxes be reduced?

$700

Using the following table, calculate the taxes for an individual with taxable income of $55,000. 10%Up to $9,500 15%$9,500-$39,500 25%$39,500-$93,600 28%$93,600-$189,400 33%$189,400-$399,150 35%Over $399,150

$9,325

Tanya received a $1,000 loan from the bank for a vacation. The bank is using the simple interest formula for this one-year, 9% loan. What is her total interest?

$90

Information about a personal bankruptcy may be reported in your credit file for

10 years.

George Franklin paid taxes of $3,800 on a taxable income of $28,000. What was his average tax rate?

13.57%

A $220 savings account that earns $5.50 interest in a year has a yield of ____________ percent. (Round your answer to 2 decimals.)

2.50

Experts suggest that the debt payments-to-income ratio should be a maximum of

20%

What is the APY for a one-year $7,800 certificate of deposit with $1,833 interest? (Round your answer to 2 decimals.)

23.50%

Given the following information, calculate the debt payments ratio: Liabilities = $25,000 Liquid assets = $5,000 Monthly credit payments = $800 Monthly savings = $760 Net worth = $75,000 Current liabilities = $2,000 Take-home pay = $2,300 Gross income = $3,500 Monthly expenses = $2,050

34.78%

What is the APY for a savings account with a $410 balance that receives $18 interest for the year? (Round your answer to 2 decimals.)

4.39%

Financial experts recommend monthly savings of ____ of gross income.

5-10%

Opal earned 8.5% in her savings account. If she is in the 30% tax bracket, what is her after-tax savings rate of return? (Round your answer to 2 decimals.)

5.95%

Nicholas earned 12.5% in his savings account. If he is in the 35% tax bracket, what is his after-tax savings rate of return? (Round your answer to 2 decimals.)

8.13%

Which of the following electronically subtracts money from your savings or checking account to pay for goods and services?

A debit card

Which of the following is NOT associated with credit cards?

A debit to your checking account

Patrick is interested in opening a different account that will allow him to write a few checks each month for a fee per check, but he is unable to maintain a minimum balance. He should open a(n)

Activity checking account.

Which of the following is NOT a valid credit application question?

All of these are valid credit application questions.

The main purposes of personal financial statements are to

All of these choices are correct

Which of the following situations describes a person who could be insolvent?

Assets $40,000; liabilities $55,000

The equation to calculate net worth is

Assets minus Liabilities = Net worth.

The document that would tell you what you received and spent over the past month is the

Cash flow statement.

Molly purchased a $1,500 dishwasher from Best Appliances. She will make 12 equal payments over the next year to pay for it. She is using

Closed-end credit.

_________ goals relate to infrequently purchased, expensive tangible items.

Durable-product

A service contract

Covers the repair costs of a product.

Consumer credit

Dates back to colonial times.

Which of the following ratios shows the relationship between debt and net worth?

Debt ratio

Which of the following is an account used to pay property taxes and homeowner's insurance?

Escrow

Mike bought a new car. His new car warranty probably included all of the following except

Extended coverage for air conditioning.

Most products come with some guarantee of quality. This type of warranty states that a defective product can be fixed or replaced during a reasonable amount of time.

Full warranty

Steve Wilson wants to deposit $150 per month into an account earning 4 percent for the next 3 years, so he can purchase a used car at that time. What type of computation would he use to determine the amount he will have accumulated for his purchase?

Future value of an annuity

Patrick Guitman recently graduated from college with $20,000 in student loans and $5,000 in credit card debt. He usually makes minimum payments on his debt and he has been late with three payments in the last year. He wants to buy a new car but was told that his interest rate on a loan would be very high. What is the most likely reason this might be so?

His credit rating is below average which results in a higher interest rate

Lonnie wanted to sell his house but didn't know what price to ask. He should consider all of the following except

His original cost.

When Ingrid was selling her house, she contacted Gabe, her real estate agent, to help her with the sale. Gabe's services included all of the following except

Home appraisal.

Frank bought some mini blinds. Although he did not receive a written warranty, the blinds should be expected to open and close properly. What kind of warranty does Frank have?

Implied warranty

Rhonda Miller wants to take out a 4 year loan to purchase a car. What type of computation would she use to calculate her monthly payments?

Present value of an annuity

These products are sold by one chain of stores and are low-cost alternatives to famous-name products.

Private-label or store brands.

Which of the following long-term goals is stated most clearly using the SMART approach?

Invest $50 per month for the next 12 years for my nephew's college fund

While evaluating alternatives, comparison shopping will be beneficial for buying

Items that can be researched easily with advertisements.

Which of the following gives the landlord the right to take legal action against a tenant for nonpayment of rent or destruction of property?

Lease

Which of the following appears as a cash outflow on a cash flow statement?

Loan payment

A variable operating cost for a vehicle is

Maintenance and repairs.

Private mortgage insurance

Must be terminated automatically when the homeowner's equity reaches 22% of the property value at the time the mortgage was executed.

The lowest payment does not necessarily mean the best credit plan. If your car loan is a long period of time, you may end up owing more than the car is worth, which is called

Negative equity.

Take-home pay is also called

Net pay.

The amount you would have left if all assets were sold and all debts were paid in full is called your

Net worth.

The consumer price index measures:

The average change in prices of a fixed basket of goods and services of urban consumers

Jim Johnson was laid off from his job two months ago. He just received an offer for a position that pays 3/4 the salary of his old job. Why should he set up a financial plan?

To increase the effectiveness of obtaining, using, and protecting his financial resources.

Which of the following is NOT correct?

When showing the home, Caryn's suggestion to open drapes but keep lights turned off to conserve energy will give her property a positive image.

When Sam applied for a loan, he was assured that his rate would not change if he closed within 30 to 90 days. Sam had a(n) ______ on the interest rate.

lock

A person with a total tax liability of $8,050 and withholding of federal taxes of $5,400 would:

owe $2,650.

Payment alternatives are part of the ____ phase of the research-based buying process.

selection and purchase