Question 1

Provide an appropriate response.
-A plan in which payments are made at the beginning of each period is called a(n)________.

Accepted Answer

A) future annuity 
B) annuity due 
C) ordinary annuity 
D) None of the above 
A) future annuity 
B) annuity due 
C) ordinary annuity 
D) None of the above

Question 2

Solve.
-Determine the total payment over the term of a home mortgage of $120,000 with a fixed APR of 6% for 30 years.

Accepted Answer

A) $689,218.94 
B) $141,509.43 
C) $323,757.28 
D) $259,005.83 
A) $689,218.94 
B) $141,509.43 
C) $323,757.28 
D) $259,005.83

Question 3

Decide whether the statement makes sense. Explain your reasoning.
-I have a fixed-rate 30-year mortgage of $120,000 at 8%. I inherited some money recently.
If I pay off my mortgage in 20 years instead of 30, the total amount of interest I will end up
paying will be less.

Accepted Answer

Yes, the statement makes sense

Question 4

Solve the problem.
-In a recent year, the total receipts for the US federal government were estimated to be $2288 billion. The total outlays were estimated to be $2613 billion. The table below shows the makeup of federal
Government outlays in that year- the percentage of total outlays spent in each category. $$\begin{array}{l}
\text { Approximate makeup of federal government outlays }\
\begin{array} { l c } 
\hline \text { Category } & \text { Portion of outlays } \
\hline \text { Social security } & 21 \% \
\text { Defense and homeland security } & 20 \% \
\text { Non-defense discretionary } & 18 \% \
\text { Medicare } & 13 \% \
\text { Medicaid, government pensions, and other mandatory spending } & 20 \% \
\text { Interest on debt } & 8 \% \
\hline
\end{array}
\end{array}$$ How much was spent on non-defense discretionary outlays that year?

Accepted Answer

A) $470 billion 
B) $523 billion 
C) $388 billion 
D) $479 billion 
A) $470 billion 
B) $523 billion 
C) $388 billion 
D) $479 billion

Question 5

Solve the equation for the unknown quantity.
-$$9 r + 3 = 48$$

Accepted Answer

A)  36 
B)  5 
C)  2 
D)  40 
A)  36 
B)  5 
C)  2 
D)  40

Question 6

Find the annual percentage yield (APY).
-A bank offers an APR of 2.4% compounded monthly.

Accepted Answer

A) 2.43% 
B) 0.40% 
C) 4.85% 
D) 0.20% 
A) 2.43% 
B) 0.40% 
C) 4.85% 
D) 0.20%

Question 7

For the loan described, calculate the monthly payment and the portions of the payments that go to principal and tointerest during the first 3 months. Use a table.
-Calculate the monthly payment and the portions of the payments that go to the principal
and to interest during the first 3 months for a home mortgage of $124,233 with a fixed APR
of 8.0% for 30 years.

Accepted Answer

The answer of For the loan described, calculate the monthly...

Question 8

Use the given stock table to answer the question.
-How does the share price for company XYZ compare to the profit per share that it earned in the past year?

Accepted Answer

A)  earnings $= 13 \times$ price 
B)  price $= 13 \times$ earnings 
C)  price $= 1.2 \times$ earnings 
D)  price $= 17.75 \times$ earnings 
A)  earnings $= 13 \times$ price 
B)  price $= 13 \times$ earnings 
C)  price $= 1.2 \times$ earnings 
D)  price $= 17.75 \times$ earnings

Question 9

Evaluate or simplify the following the expression.
-$16^{1 / 2} \div 16 ^ { - 1 / 2 }$

Accepted Answer

A)  $- 1$ 
B)  4 
C)  8 
D)  16 
A)  $- 1$ 
B)  4 
C)  8 
D)  16

Question 10

Provide an appropriate response.
-An origination fee is one example of a closing cost when taking out a mortgage loan.

Accepted Answer

A) True 
 B)False

Question 11

Solve the problem.
-You need a $87,168 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 $8 \%$
Option 2: a 15-year loan at 7.5\%

Accepted Answer

A)  Option 1: $\$ 639.61$
Option 2: $\$ 808.06$ 
B)  Option 1: $\$ 651.46$
Option 2: $\$ 842.40$ 
C)  Option 1: $\$ 648.89$
Option 2: $\$ 833.97$ 
D)  Option 1: $\$ 631.70$

Option 2: \$785.14 
A)  Option 1: $\$ 639.61$
Option 2: $\$ 808.06$ 
B)  Option 1: $\$ 651.46$
Option 2: $\$ 842.40$ 
C)  Option 1: $\$ 648.89$
Option 2: $\$ 833.97$ 
D)  Option 1: $\$ 631.70$

Option 2: \$785.14

Question 12

Compute the total and annual returns on the described investment.
-Seven years after paying $\$ 5708$ for shares in a new company, you sell the shares for $\$ 11,475$

Accepted Answer

A)  Total Return: 106.09\%
Annual Return: 11.01\% 
B)  Total Return: $95.98 \%$
Annual Return: 9.97\% 
C)  Total Return: $80.83 \%$
Annual Return: $8.39 \%$ 
D)  Total Return: 101.03\%
Annual Return: 10.49\% 
A)  Total Return: 106.09\%
Annual Return: 11.01\% 
B)  Total Return: $95.98 \%$
Annual Return: 9.97\% 
C)  Total Return: $80.83 \%$
Annual Return: $8.39 \%$ 
D)  Total Return: 101.03\%
Annual Return: 10.49\%

Question 13

Use the given stock table to answer the question.
-Based on the fact that stocks historically trade at an average P/E ratio of about 12-14, does the stock price of company XYZ seem cheap, about right, or expensive right now?

Accepted Answer

A) expensive 
B) about right 
C) cheap 
A) expensive 
B) about right 
C) cheap

Question 14

Determine whether the spending pattern described is at, above, or below the national average. Assume that any salariesor wages are after tax.  
-A couple under the age of 30 has a combined household income of $3700 per month and spends $ 180 per month on donations.

Accepted Answer

A) below average 
B) at average 
C) above average 
A) below average 
B) at average 
C) above average

Question 15

Decide whether the statement makes sense. Explain your reasoning.
-Sue opened a savings account and deposited $10,000. On the same day Pat opened an
account at a different bank and also deposited $10,000. Both accounts had the same APR
and both were paying compound interest but after two years Sue had more in her account
than Pat did. Neither person made any additional deposits or withdrawals from their
account during those two years.

Accepted Answer

Yes, this is possible. Sue's b

Question 16

Answer the question.
-You currently drive 240 miles per week in a car that gets 16 miles per gallon of gas. A new fuel-efficient car costs $13,000 (after trade-in on your current car)and gets 40 miles per gallon.
Insurance premiums for the new and old car are $800 and $600 per year, respectively. You
Anticipate spending $1400 per year on repairs for the old car and having no repairs on the new car.
Assuming that gas remains at $3.50 per gallon, estimate the number of years after which the costs
Of owning the new and old cars are equal.

Accepted Answer

A) 5.1 years 
B) 5.6 years 
C) 4.6 years 
D) 4.2 years 
A) 5.1 years 
B) 5.6 years 
C) 4.6 years 
D) 4.2 years

Question 17

Provide an appropriate response.
-All of your income for the year including wages, tips, profits from a business, interest or dividends from investments is called your _____ income.

Accepted Answer

A) adjusted gross 
B) gross 
C) taxable 
D) None of the above 
A) adjusted gross 
B) gross 
C) taxable 
D) None of the above

Question 18

Calculate the amount of interest you'll have at the end of the indicated period.
-You invest $800 in an account that pays simple interest of 4% for 5 year(s).

Accepted Answer

A) $40.00 
B) $160.00 
C) $16.00 
D) $640.00 
A) $40.00 
B) $160.00 
C) $16.00 
D) $640.00

Question 19

Provide an appropriate response.
-A loan that you pay off with equal regular payments is called an installment loan.

Accepted Answer

A) True 
 B)False

Question 20

Evaluate or simplify the following the expression.
-$2 ^ { 3 }$

Accepted Answer

A) 6 
B) 5 
C) 4 
D) 8 
A) 6 
B) 5 
C) 4 
D) 8

Provide an appropriate response. -A plan in which payments are made at the beginning of each period is called a(n)________.

Solve. -Determine the total payment over the term of a home mortgage of $120,000 with a fixed APR of 6% for 30 years.

Decide whether the statement makes sense. Explain your reasoning. -I have a fixed-rate 30-year mortgage of $120,000 at 8%. I inherited some money recently. If I pay off my mortgage in 20 years instead of 30, the total amount of interest I will end up paying will be less.

Solve the equation for the unknown quantity. - $9 r + 3 = 48$

Find the annual percentage yield (APY). -A bank offers an APR of 2.4% compounded monthly.

Use the given stock table to answer the question. -How does the share price for company XYZ compare to the profit per share that it earned in the past year?

Evaluate or simplify the following the expression. - $16^{1 / 2} \div 16 ^ { - 1 / 2 }$

Provide an appropriate response. -An origination fee is one example of a closing cost when taking out a mortgage loan.

Solve the problem. -You need a $87,168 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 $8 \%$ Option 2: a 15-year loan at 7.5\%

Compute the total and annual returns on the described investment. -Seven years after paying $\$ 5708$ for shares in a new company, you sell the shares for $\$ 11,475$

Use the given stock table to answer the question. -Based on the fact that stocks historically trade at an average P/E ratio of about 12-14, does the stock price of company XYZ seem cheap, about right, or expensive right now?

Determine whether the spending pattern described is at, above, or below the national average. Assume that any salariesor wages are after tax. -A couple under the age of 30 has a combined household income of $3700 per month and spends $ 180 per month on donations.

Provide an appropriate response. -All of your income for the year including wages, tips, profits from a business, interest or dividends from investments is called your _____ income.

Calculate the amount of interest you'll have at the end of the indicated period. -You invest $800 in an account that pays simple interest of 4% for 5 year(s).

Provide an appropriate response. -A loan that you pay off with equal regular payments is called an installment loan.

Evaluate or simplify the following the expression. - $2 ^ { 3 }$

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