Topic Test — Cumulative exam Answers

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?

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?

Kim has worked in the tech industry for some time and would like to start consulting. In opening her new business, she will need equipment. She needs to purchase 3 laptops, 2 desktop computers, and a fax machine. Each laptop costs $546.78, each desktop computer costs $1,255.99, and the cost of the fax machine is $125.99. She currently has $3,500 in her savings account. Determine if Kim has enough in her savings account to cover the expenses of her new company, and if she doesn't have enough, determine the amount needed to cover the cost.

Consider today’s stock listings for Bukkia Hog Farms, shown below.52 wk High52 wk LowSymbolDiv.CloseNet Change212.45106.63BHF18.95140.268.85Today, Ken sold the 116 shares of Bukkia Hog Farms that he purchased yesterday. How much profit did Ken make?

Sheila has a plan to save $45 a month for 18 months so that she has $810 to remodel her bathroom. After 13 months Sheila has saved $510. If the most Sheila can possibly save is $70 per month, which of the following statements is true?

Which of the following modifications to the list of assets and liabilities below would result in a net worth of $100,000?Recreational Vehicle valued at $110,000.Car valued at $27,000.Medical bills totaling $8,700.Loan balance of $80,000.Savings of $5,000.Retirement fund of $50,000.Credit card balance of $2,300.

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?

Mary pays income tax according to the graduated schedule shown below. If Mary’s taxable income is $68,562, how much income tax does she owe, rounded to the nearest dollar?

The table below shows the earnings, in thousands of dollars, for three different commissioned employees. $2,000 + 3% on all sales7% on all sales5% on the first $40,000 + 8% on anything over $40,000December4.45.65.2January3.53.853.6February4.74.94.4Who had the largest dollar amount in sales for the month of December?

A lender estimates the closing costs on a home loan will be 3.75% of the loan amount of $120,000. The actual closing costs are listed below. Closing Cost Charge Loan origination $300 Title insurance $600 Attorney’s fees $1,250 Appraisal $550 Inspection $525 Recording fees $125 Escrow $2,000 Evaluate the lender’s good faith estimate.

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.

Teri goes shopping for some new clothes and then out to lunch with a friend. She spends $32.94 on some shirts, $15.89 for a belt and $19.99 each for two dresses that are on sale. For lunch, Teri has a salad that is $6.95, iced tea for $1.49 and dessert for $3.49. Teri pays 7% sales tax on both her shopping items and lunch. She tips her server 15%. How much has Teri spent all total for the day?

The stores below each have the same snowboard for an original price of $189.59. At which store can you get the snowboard for the lowest price?Store A: Sale of 30% off and a successive discount of 10% off.Store B: Sale of 20% off and a successive discount of 20% off.Store C: Sale of 40% off.

The following graph represents real estate prices in a given area over a period of 28 years. Using the above information, which kind of investor would likely turn the greatest profit in this market, given that each of them purchased a house in this area at year 0?

Josef owns four par value $1,000 bonds from Dowc Beverage Co. Each bond has a market value of 104.561 and gives 9.2% interest. Josef also owns 170 shares of stock in Dowc Beverage Co. Stock in Dowc Beverage Co. has a share price of 26.25 and pays a dividend of $2.38. If the broker Josef employed to purchase these stocks and bonds charges a commission of $72 for each ten shares of stock bought or sold and a commission of 4% of the market value of each bond bought or sold, which aspect of Josef’s investment in Dowc Beverage Co. has a greater percent yield, and how much greater is it?

Greg just purchased a house for $450,000. His annual homeowners insurance premium is $0.42 per $100 of value. If his annual premium is divided into equal monthly payments, what will Greg have to pay on a monthly basis to keep his home insured?

Greg invests $2,680 in a CD paying 7.0% interest, and $3,060 in an online savings account paying 4.5% interest. How much more interest will the CD have earned than the savings account after 1 year?

Curtis just received a raise at work increasing his salary by $8,500. He knows that an increase in salary will increase the amount of federal income taxes withheld from his paycheck. Which of the following statements best describes the effect his raise will have on state income tax withholdings?

Cameron has decided to diversify his investments in the following way:$3,000 in an account earning 2.7% simple interest$5,000 in a savings account earning 1.8% interest compounded annually$5,000 in a certificate of deposit earning 3.9% interest compounded quarterlyHow much total interest will Cameron earn on his investments at the end of 3 years?

As a part-time employee, Rachel does not qualify for any benefits from her current employer. Seeing a need for a health care program, Rachel went shopping for health insurance and is trying to decide between two options with a national health insurance provider. The benefits of each option are outlined in the tables below. OPTION 1: Fee-for-service OPTION 2: HMO $225 monthly premium $630 monthly premium $7,500 deductible No annual deductible Co-pays: Co-pays: Name-brand Drugs: $30 Name-brand Drugs: $25 Generic Drugs: $12 Generic Drugs $10 Visits: Visits: Primary Care Physician $30 Primary Care Physician $20 Specialist: $75 Specialist: $62 Urgent Care: $100 Urgent Care: $50 Emergency Room: $250 Emergency Room: $175 The first option is a fee-for-service plan with a $7,500 deductible. Rachel must pay the deductible amount in health-related costs (not including co-pays) before the insurance company will contribute. This plan costs $225.00 per month and requires co-pays for most standard healthcare costs. The second option is an HMO. It is significantly more expensive at $630 per month, but has no annual deductible. The standard co-pays are also less than those in the other option. Rachel is a young lady with very few health care requirements. She anticipates one monthly visit to her primary care physician, and one annual visit to her allergy specialist. She has two generic prescription allergy medicines that need to be filled twice a month. If Rachel is able to stay healthy the entire year and does not accrue any additional health care costs, which of the following statements is true for her situation?