Finance
If Diane was in a 25% tax bracket and received a $1,000 tax credit, by how much would her taxes be reduced?
$1,000
. If a $10,000 investment earns a 4 % annual return, what should its value be after one year?
$10,400
If Patty Shoemaker estimates that her $100 weekly grocery bill will increase at an annual inflation rate of 4%, what should her weekly grocery bill be in 3 years?
$112.50
If a $10,000 investment earns a 7% annual return, what should its value be after 5 years?
$14,030
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
Using the following table, calculate the taxes for an individual with taxable income of $20,800
$2,695.
A family with $50,000 in assets and $30,000 of liabilities would have a net worth of
$20,000.
Annual earnings on a $500 Certificate of Deposit earning 4.50% would be
$22.50
Patrick Guitman has a net worth of $165,000 and liabilities of $176,000. What are his total assets?
$341,000
Using the following table, calculate the taxes for an individual with taxable income of $30,000
$4,075
A financial company that advertises on television will pay you $60,000 now for annual payments of $10,000 that you are expected to receive for a legal settlement over the next 10 years. What is the present value of the annual payment if you estimate the time value of money at 10 percent??
$61,445.67
Rebecca Gladlyn budgeted $1,250 for housing and utilities in July. She actually spent $1,162. What is her budget variance?
$88 surplus
Janet is completing her federal income taxes for the year and has identified the amounts listed here. How much can she rightfully deduct? • AGI: $42,000 • Medical and dental expenses: $1,100 • State income taxes: $1,000 • Mortgage interest: $7,000 • Charitable contributions: $1,250
. $9,250
Which of the following will increase the net worth of a household?
. Decrease spending by $5 per day
If a $10,000 investment increases to $10,080 in one year, what is its rate of return?
.8 percent
Given the following information, calculate the savings ratio
21.71%
Given the following information, calculate the debt ratio percentage:
33.79 or 34.78
Given the following information, calculate the debt payments ratio Liabilities = $24,500 Liquid assets = $4,900 Monthly credit payments = $800 Monthly savings = $760 Net worth = $72,500 Current liabilities = $1,600 Take-home pay = $2,300 Gross income = $3,500 Monthly expenses = $2,040
34.78% or 33.79%
. If inflation is expected to be 9 percent, how long will it take for prices to double?
8 years
Gross income after certain reductions have been made is
Adjusted gross income.
Items with monetary value are referred to as
Assets
Which of the following situations describes a person who could be insolvent?
Assets $40,000; liabilities $45,000
The tax based on the total tax due divided by taxable income is called the
Average tax rate
Adjustments to income include all of the following except
Charity contributions
A debt ratio of 0.5 indicates
For every dollar of net worth, debt equals $0.50.
Jake Jones wants to deposit $100 per month into an account earning 5 percent for the next 4 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 for his purchase?
Future value of an annuity
When Paul completes his taxes, he can include all of the following as exemptions except
His 20-year-old son who is working full-time and living in an apartment
This tax is a major financial planning factor for most people because it is sometimes imposed at the federal, state, and local levels.
Income tax
The time value of money refers to
Increases in an amount of money as a result of interest earned.
The number of personal financial records a household has to organize may seem overwhelming. How long should you keep documents relating to the purchase of real estate?
Indefinitely
The rising of prices that causes changes in buying power is referred to as ____________ risk
Inflation
Athena wants to determine if she should itemize her deductions. She has identified several possible deductions. Which of the following is NOT a proper deduction?
Miscellaneous expenses less than 2% of AGI
An advantage of investing in a 401(k) plan is the
Possibility of receiving an employer match on your contributions.
Wanda Green 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
The tax that is a major source of revenue for local governments is called a(n)
Real estate tax.
The uncertainty associated with decision making is referred to as
Risk
Payroll deductions for federal government retirement benefits (such as old age, survivor, and disability insurance) are called
Social Security taxes
Opportunity cost refers to:
The trade-off of a decision
The main purposes of personal financial statements are to
These are all correct
The Rule of 72 is:
Used to estimate how long it takes for prices to double using a given annual inflation rate