Question 1

Calculate the balance under the given assumptions.
-Find the savings plan balance after 17 months with an APR of 3% and monthly payments of $370.

Accepted Answer

A) $5454.78 
B) $6417.39 
C) $4483.35 
D) $3810.85 
A) $5454.78 
B) $6417.39 
C) $4483.35 
D) $3810.85

Question 2

Decide whether the statement makes sense. Explain your reasoning.
-Jeremy hasn't paid off his credit card debt but he knows that it's important to start saving.
He decides to invest some money in a savings account and to continue making just the
minimum payments each month on his credit card. The interest rate on his credit card is
1.5% per month.

Accepted Answer

No, the statement does not make sense. I

Question 3

Decide whether the statement makes sense. Explain your reasoning. 
-If two accounts offer the same APR, the account which compounds interest daily will be a
better deal than the account which compounds interest weekly.

Accepted Answer

Yes, the statement makes sense

Question 4

Prorate the given expenses to find the monthly cost.
-Keiko pays $320 per month for food, a semiannual health insurance premium of $1500, and an annual car insurance premium of $600. Round your answer to the nearest dollar.

Accepted Answer

A) $495 
B) $620 
C) $670 
D) $327 
A) $495 
B) $620 
C) $670 
D) $327

Question 5

Provide an appropriate response.
- If you deposit $5,000 in an in investment account today, it can double in value to $10,000 in just a couple decades even at a relatively low interest rate $( 6 - 8 \% )$

Accepted Answer

A) True 
 B)False

Question 6

Evaluate or simplify the following the expression.
-$36^{1 / 2}$

Accepted Answer

A)  12 
B)  6 
C)  24 
D)  18 
A)  12 
B)  6 
C)  24 
D)  18

Question 7

Solve the problem.
-You want to have a $40,000 college fund in 6 years. How much will you have to deposit now in an account with an APR of 5% and annual compounding?

Accepted Answer

A) $24,949.06 
B) $31,930.99 
C) $28,949.30 
D) $29,848.62 
A) $24,949.06 
B) $31,930.99 
C) $28,949.30 
D) $29,848.62

Question 8

Solve the problem.
-The table below shows the expenses and payments for 4 months on a credit card account
with an initial balance of $500. Assume that the interest rate is 1.7% per month (20.4% APR)and that interest for a given month is based on the balance for the previous month.
Complete the table. $$\begin{array} { l c c c c } 
\hline \text { Month } & \text { Payment } & \text { Expenses } & \text { Interest } & \text { Balance } \
\hline 0 & - & - & - & \$ 500 \
1 & \$ 200 & \$ 120 & 1.7 \% \times \$ 500 = \$ 8.50 & \$ 428.50 \
2 & \$ 100 & \$ 310 & & \
3 & \$ 300 & \$ 60 & & \
4 & \$ 250 & \$ 180 & & \
\hline
\end{array}$$

Accepted Answer

\[\begin{array} { l c c c c } 
\hline \t

Question 9

Use the compound interest formula for continuous compounding to determine the accumulated balance after the statedperiod.
-A $7478 deposit in an account with an APR of 6.5% compounded continuously for 4 years.

Accepted Answer

A) $9698.44 
B) $10,062.40 
C) $9620.19 
D) $9678.20 
A) $9698.44 
B) $10,062.40 
C) $9620.19 
D) $9678.20

Question 10

Solve the problem. Refer to the table if necessary.  
-Carmen and James are married and filed jointly. Their combined wages were $91,109. They earned a net of $1887 from a rental property they own, and they received $1595 in interest. They
Claimed four exemptions for themselves and two children. They contributed $3701 to their
Tax-deferred retirement plans, and their itemized deductions total $9765. Find their adjusted gross
Income.

Accepted Answer

A) $81,125 
B) $90,890 
C) $87,700 
D) $108,057 
A) $81,125 
B) $90,890 
C) $87,700 
D) $108,057

Question 11

Complete the sentence: On an annual basis the first set of expenses is ____ % of the second set of expenses.
-Julio goes to a concert once every two weeks at an average ticket price $70; he spends $600 per year on car insurance.

Accepted Answer

A) 25% 
B) 607% 
C) 303% 
D) 140% 
A) 25% 
B) 607% 
C) 303% 
D) 140%

Question 12

Use the given stock table to answer the question.
-How much profit per share did company ABC earn in the past year?

Accepted Answer

A)  $\$ 1.21$ 
B)  $\$ 1.27$ 
C)  $\$ 1.15$ 
D)  $\$ 1.02$ 
A)  $\$ 1.21$ 
B)  $\$ 1.27$ 
C)  $\$ 1.15$ 
D)  $\$ 1.02$

Question 13

Provide an appropriate response.
-The lump sum deposit that would give you the same end result as regular payments into a savings plan is called the _____ of the savings plan.

Accepted Answer

A) present value 
B) total value 
C) future value 
D) None of the above 
A) present value 
B) total value 
C) future value 
D) None of the above

Question 14

Solve the problem. Refer to the table if necessary. 2013 Marginal Tax Rates, Standard Deductlons, and Exemptlons**

- Each higher marginal rate begins where the prior one leaves off. For example, for a single person, the $15 \%$ marginal rate affects income starting at $\$ 8925$, which is where the $10 \%$ rate leaves off, and continuing up to $\$ 36,250$.
" This table ignores the effects of (i) exemption and deduction phase-outs that apply to high-income taxpayers and (ii) the alternative minimum tax (AMT) that affects many middle- and high-income taxpayers.
-Stephen earned $62,292 from wages as an accountant and made $2987 in interest. Find how much he paid in FICA and income taxes. Assume he is single and takes the standard deduction.

Accepted Answer

A) $14,723 
B) $18,585 
C) $14,514 
D) $14,023 
A) $14,723 
B) $18,585 
C) $14,514 
D) $14,023

Question 15

Provide an appropriate response.
-Which of the following will allow the federal debt to be retired?

Accepted Answer

A) Zero gross deficit 
B) Zero net surplus 
C) Zero net deficit 
D) Zero gross debt 
A) Zero gross deficit 
B) Zero net surplus 
C) Zero net deficit 
D) Zero gross debt

Question 16

Calculate the amount of interest you'll have at the end of the indicated period.
-You invest $6000 in an account that pays simple interest of 3% for 6 years.

Accepted Answer

A) $1080.00 
B) $180.00 
C) $1380.60 
D) $1009.00 
A) $1080.00 
B) $180.00 
C) $1380.60 
D) $1009.00

Question 17

Solve.
-Denise is in the 35% tax bracket and claims the standard deduction. How much will her tax bill be reduced if she makes a $3788 contribution to charity?

Accepted Answer

A) $1325.80 
B) $5113.80 
C) $0 
D) $3788 
A) $1325.80 
B) $5113.80 
C) $0 
D) $3788

Question 18

Decide whether the statement makes sense. Explain your reasoning.
-My annual income after tax is only $25,000. I need to cut back on my nonessential
spending. Something has to go - either the mango smoothies, the movies, or the vacation. I
figure it's the vacation that is making the biggest dent in my budget. I take a vacation once
a year which costs about $1200. I go to the movies once a week and spend a total of $18
and I have a mango smoothie every day at my favorite cafe. It costs $4.50 plus tax.

Accepted Answer

In fact it is the mango smoothies that a

Question 19

Solve the problem.
-Suppose your after-tax income is $36,357. Your annual expenses are $28,740 for rent, $6489 for food and household expenses, $1283 for interest on credit cards, and $6668 for entertainment, travel, and
Other. Do you have a surplus or deficit?

Accepted Answer

A) Deficit 
B) Surplus 
A) Deficit 
B) Surplus

Question 20

Solve the problem.
-You need a $159,118 loan. Compute the monthly payment for each of the loan options listed below. Assume that the loans are fixed rate. Option 1: a 30 year-loan at an APR of $7.25 \%$
Option 2: a 15-year loan at $6.8 \%$

Accepted Answer

A)  Option 1: $\$ 1069.79$
Option 2: $\$ 1369.83$ 
B)  Option 1: $\$ 1103.71$
Option 2: $\$ 1460.57$ 
C)  Option 1: $\$ 1085.47$
Option 2: $\$ 1412.46$ 
D)  Option 1: $\$ 1108.73$

Option 2: \$1476.21 
A)  Option 1: $\$ 1069.79$
Option 2: $\$ 1369.83$ 
B)  Option 1: $\$ 1103.71$
Option 2: $\$ 1460.57$ 
C)  Option 1: $\$ 1085.47$
Option 2: $\$ 1412.46$ 
D)  Option 1: $\$ 1108.73$

Option 2: \$1476.21

Calculate the balance under the given assumptions. -Find the savings plan balance after 17 months with an APR of 3% and monthly payments of $370.

Decide whether the statement makes sense. Explain your reasoning. -If two accounts offer the same APR, the account which compounds interest daily will be a better deal than the account which compounds interest weekly.

Prorate the given expenses to find the monthly cost. -Keiko pays $320 per month for food, a semiannual health insurance premium of $1500, and an annual car insurance premium of $600. Round your answer to the nearest dollar.

Provide an appropriate response. - If you deposit $5,000 in an in investment account today, it can double in value to $10,000 in just a couple decades even at a relatively low interest rate $( 6 - 8 \% )$

Evaluate or simplify the following the expression. - $36^{1 / 2}$

Solve the problem. -You want to have a $40,000 college fund in 6 years. How much will you have to deposit now in an account with an APR of 5% and annual compounding?

Use the compound interest formula for continuous compounding to determine the accumulated balance after the statedperiod. -A $7478 deposit in an account with an APR of 6.5% compounded continuously for 4 years.

Complete the sentence: On an annual basis the first set of expenses is ____ % of the second set of expenses. -Julio goes to a concert once every two weeks at an average ticket price $70; he spends $600 per year on car insurance.

Use the given stock table to answer the question. -How much profit per share did company ABC earn in the past year?

Provide an appropriate response. -The lump sum deposit that would give you the same end result as regular payments into a savings plan is called the _____ of the savings plan.

Provide an appropriate response. -Which of the following will allow the federal debt to be retired?

Calculate the amount of interest you'll have at the end of the indicated period. -You invest $6000 in an account that pays simple interest of 3% for 6 years.

Solve. -Denise is in the 35% tax bracket and claims the standard deduction. How much will her tax bill be reduced if she makes a $3788 contribution to charity?

Solve the problem. -Suppose your after-tax income is $36,357. Your annual expenses are $28,740 for rent, $6489 for food and household expenses, $1283 for interest on credit cards, and $6668 for entertainment, travel, and Other. Do you have a surplus or deficit?

Solve the problem. -You need a $159,118 loan. Compute the monthly payment for each of the loan options listed below. Assume that the loans are fixed rate. Option 1: a 30 year-loan at an APR of $7.25 \%$ Option 2: a 15-year loan at $6.8 \%$

Thinking Critically

Approaches to Problem Solving

Numbers in the Real World

Statistical Reasoning

Putting Statistics to Work

Probability: Living With the Odds

Exponential Astonishment

Modeling Our World

Modeling With Geometry

Mathematics and the Arts

Filters

Exam 4: Managing Money