Topic Test — Cumulative exam Answers

Marquet is relocating to an area where she will be attending college. She finds a townhome with an option to rent or buy. The conditions of each are shown below.Rent: Move-in cost of $1,350 and monthly payment of $795.Buy: Move-in cost of $8,235 and monthly payments of $750.Marquet plans to stay in the area for the 5 years it will take her to get a graduate degree, so she decides to buy. Choose the best evaluation of Marquet’s decision.

Over the period of a year, Julie’s net worth decreased. Which of the following could be true?

Create an example of a situation where there is a negative cash flow.

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?

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

Jodi is retiring at the age of 65. When she retires, she estimates that she will need a monthly income for 25 years. If Jodi starts with $328,133.32 in an account that pays 6.2% interest compounded monthly, approximately what monthly income will she be able to draw?

Shanika and Vanesa are comparing their electric bills for the past month. Shanika is on a standard use plan and Vanesa is on an interval use plan. Each person’s usage is listed on the chart below:Standard Use PlanInterval Use Plan7.5 cents/kWh for the first 400 kWh10 cents/kWh for the next 400 kWh12.5 cents/kWh for anything over 800 kWhOn-peak hours - 15 cents/kWhOff-peak hours - 3 cents/kWhBoth women use 1,325 kWh for the given 30 day period. Vanesa uses 500 kWh during on-peak hours and 825 during off-peak hours. Which person ends up paying more for their utilities? How much more?

You have a gross income of $117,151 and are filing your tax return singly. You claim one exemption and can take a deduction of $2,713 for interest on your mortgage, an adjustment of $2,791 for business losses, an adjustment of $1,346 for alimony, a deduction of $2,086 for property taxes, a deduction of $2,376 for contributions to charity, and an adjustment of $1,091 for contributions to your retirement fund. The standard deduction for a single filer is $5,700, and exemptions are each worth $3,650. What is the difference between your adjusted gross income and your taxable income?

The book store is having a sale where all hardcover books are 20% off. Jamie also has a coupon for 15% off any fiction book. Jamie buys a hardcover fiction book that is priced $32.99. How much will Jamie save by buying the book on sale and using the coupon?

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?

Winnie is buying dog food for her dog. She needs 10 pounds of food each week, but has room to store any extra food that she purchases.The food comes in 4 different sizes as given below:4.2 pounds for $4.998.5 pounds for $9.2712 pounds for $11.0420 pounds for $18.99Winnie is trying to be a smart shopper and get the best deal on the dog food. Which size bag of dog food should Winnie buy?

Henry and Walter open savings accounts at the same time. Henry invests $6,500 at 4.54% simple interest, and Walter invests $7,100 at 4.74% simple interest. After eight years, how much more interest has Walter earned than Henry?

By examining the spreadsheet below, what part of the financial plan might be missing?

Jim and Jackie are married with three children at home and a mortgage. Jim’s net pay per year is $67,000 and Jackie does not have income. Their mortgage payment of $2,800 includes insurance on their home. They have additional monthly expenses of $2,700.Jim contributes 15% of his earnings to a retirement fund and they have $5,000 in savings. There is a $500,000 life insurance policy on Jim and a $100,000 policy on Jackie.As their financial advisor, what part of Jim and Jackie’s financial plan would you encourage them to work on?

Which of the following companies offers the greatest total employment compensation? Company ACompany BCompany CCompany DGross Pay$41,600$40,800$41,300$42,000Paid insurance$1,800$2,400$2,000$2,100Paid time off$3,700$3,100$2,800$2,900Job expenses$2,000$1,800$800$2,500

You have a restaurant bill of $61.45. If you are taxed % and decide to tip your server 15%, how much is your total?

Jasmine has a gross pay of $754.80. By how much will Jasmine’s gross pay be reduced if she has the following items withheld?federal tax of $31Social Security tax that is 6.2% of her gross payMedicare tax that is 1.45% of her gross paystate tax that is 18% of her federal tax