Topic Test — Cumulative exam Answers

Sammy makes $2,362/month as a baseball coach. He is making a budget, and has created the following chart in order to divide his monthly paycheck into his various accounts:Expense type FrequencyAccountMonthly amountItemsEssential (fixed)MonthlyChecking$1,292Rent, car, insuranceEssential (variable)MonthlyChecking$420Basic groceries, telephone, electricity, cable TV, batting practiceNon-essentialMonthlyCash$260Snack items, restaurants, gifts, moviesOther (predictable)AnnualSavings$130Health exams, clothing, food, baseball coach magazineOther (unpredictable)AnnualEmergency savings$210Non-insured healthcare, repairs, and income replacementOther (long-term)5 yearsVacation savings$50VacationTotal $2,362 Sammy makes monthly deposits from each paycheck into the various accounts, and then spends from those accounts only for their defined purposes. He knows that it is not a perfect system, but thinks that it will help to assure coverage for future expenses. Using his essential expenses as a guideline, how much will Sammy need to save if he wants to have 3 times the amount of his living expenses in the bank as part of his emergency savings. How long will it take him to achieve his goal?

You work for a lender that requires a 15% 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. Person A Person B Person C Person D home value $95,000 $107,000 $120,000 $128,000 income $46,000 $53,000 $58,000 $60,000 savings $20,000 $13,910 $18,000 $19,200 recurring debt $310 $198 $265 $400

Sandy is trying to reconstruct her spending pattern from July. She knows that she had $277 in her account on July 1, but after that, her receipts and balance statements are all scrambled. Here are Sandy’s records:DateTransaction TypeAmount ($)7/26Purchase867/25Deposit767/4Purchase1377/6Deposit907/10Purchase1317/9Purchase1457/15Deposit1527/19Purchase137Assuming that this is a complete, if scrambled, record of Sandy’s July spending and that any overdraft fees incurred do not affect the running total, how many times did Sandy overdraw her account in July?

Based on the above chart, which industry’s average annual rate of change is projected to decrease the most in the 2006-2016 period as compared to its average annual rate of change during 1996-2006?

Rex has several hundred thousand dollars to save, and he wants to keep it as safe as possible. What would you recommend Rex do to keep his money safe?

Vera orders some prints of photos that she uploaded to her computer. She orders 3 of the 5 x 7 prints for $0.89 each, 12 of the 4 x 6 prints for $0.15 each and 1 of the 8 x 10 prints for $2.99. She also orders a photo album for $8.69. Vera pays taxes that are 7% of the total purchase price. Her shipping charges are based on the following table:Amount of PurchaseStandard ShippingExpress Shippingup to $20free$3.50$50 up to $100$6.35$8.20$100 up to $200$7.80$11.60$200 and over$10.50$16.45Vera selects standard shipping and the company bills her credit card $20.78 for the total of the online purchase. Determine if Vera has been billed correctly for her purchase.

Choose the method of pay that would result in the most earnings for one month on sales of $73,620.

Lauryn’s wages were not as much as she had budgeted. How can her budget be modified so there will be a positive actual net income?

A married couple buys 280 shares of stock for a total investment of $8,722. They decide to sell all of their shares in the fund at the listing value shown below.Name of FundNAVOffer PriceCEH Mid-Cap$31.05$31.20Determine if the couple makes a profit or loss, and how much per share.

Shaniqua brings home $225 per week working 25 hours. She is able to save $25 of her earnings each week. Shaniqua wants to have $600 saved at the end of 15 weeks. She is allowed to work up to 30 hours per week if she wants. She can save all the money earned working extra hours. Which of the following statements is true?

Determine the total annual FICA tax for an annual salary of $110,330. Use $106,800 for maximum taxable earnings.

Jerry is currently insured through AA Auto Insurance, but would like to lower his auto insurance premium by at least $10 per month. His current insurance plan includes the $50/100,000 limit for bodily injury, $100,000 limit for property damage, a $250 deductible for collision, and a $50 deductible for comprehensive. Which of the following adjustments would allow Jerry to meet his goal?AA Auto Insurance Type of Insurance CoverageCoverage LimitsAnnual PremiumsBodily Injury $25/$50,000$22.50 $50/100,000$31.75 $100/300,000$40.25 Property Damage$25,000 $120.50 $50,000 $144.75 $100,000 $193.00 Collision$100 deductible$520.00 $250 deductible$415.25 $500 deductible$275.75 Comprehensive$50 deductible$110.25 $100 deductible$100.00

Because Aaron, age 32, is a smoker, he must pay more for life insurance. Given that Company A charges 20% more for smokers, Company B charges 18% more for smokers, Company C charge 25% more for smokers and Company D charges 15% more for smokers, Aaron decides to buy his $250,000 policy from Company B. Which of the following statements is true?

The table below shows the typical hours worked by employees at a company. A salaried employee makes $50,000 per year. Hourly employees get paid $20 per hour, but get $30 per hour for each hour over 40 hours.Sun.Mon.Tues.Wed.Thurs.Fri.Sat.08899.57.54Which of the payment options would you recommend to a new employee?

The table below shows the typical hours worked by employees at a company. A salaried employee makes $50,000 per year. Hourly employees get paid $20 per hour, but get $30 per hour for each hour over 40 hours.Sun.Mon.Tues.Wed.Thurs.Fri.Sat.08899.57.54Which of the payment options would you recommend to a new employee?

Damian wants to save $7200 to buy a car within the next 2 years. Which budget would help Damian save enough money to buy a car in a timely manner with minimal effect on his other essential expenses? Monthly Budget Budget A Budget B Budget C Budget D Income $1000 $1,000 $1,000 $1,000 Expenses- Rent Utilities Food Bus Pass Car Savings School Savings $300 $75 $150 $25 $350 $100 $300 $75 $150 $25 $250 $200 $300 $75 $75 $0 $300 $250 $300 $75 $150 $25 $100 $350

If the purchase price for a house is $309,900, what is the monthly payment if you put 20% down for a 30 year loan with a fixed rate of 6%?

Marilyn has a biweekly gross pay of $810 and claims 3 federal withholding allowances. Marilyn has all of the following deductions from her gross pay: federal tax from the following table Social Security tax that is 6.2% of her gross pay Medicare tax that is 1.45% of her gross pay state tax that is 21% of her federal tax Determine how Marilyn’s net pay will be affected if she increases her federal withholding allowances from 3 to 4.