The following table shows the assets and liabilities of the Smith family in 2005 and 2009.

2005

2009

home valued at $200,000

home valued at $180,000

mortgage of $30,000

home equity loan of $18,000

car valued at $25,000

car valued at $18,000

car loan of $8,000

boat valued at $20,000

personal loan of $5,000

Based on the table, which of the following is true?

a.

From 2005 to 2009, both assets and liabilities decreased.

b.

From 2005 to 2009, both assets and liabilities increased.

c.

From 2005 to 2009, assets decreased and liabilities increased.

d.

From 2005 to 2009, assets increased and liabilities decreased. Hank is a salaried plus commission employee. Hank has a monthly salary of $2,500 and earns 5.5% commission on all sales. Which of the following expressions represents Hank's total earnings in one month if he has $6,300 in sales?

a.

2,500 + (0.055)(6,300)

b.

2,500 + (5.5)(6,300)

c.

(2,500) (5.5) + 6,300

d.

(2,500) (0.055) + 6,300 A graduated commission employee makes 3.5% interest on the first $50,000 in sales and 6.5% interest on all sales over $50,000. Which of the following expressions represents the employee's total earnings on $81,500 in sales?

a.

(0.035)(50,000) + (0.065)(81,500)

b.

(0.035)(50,000) + (0.065)(31,500)

c.

(0.35)(50,000) + (0.65)(31,500)

d.

(3.5)(50,000) + (6.5)(31,500) An employee has an annual salary of $51,300. They receive $2,830 in health insurance and $4,600 in paid time off per year. They drive their personal vehicle for work which costs them $600 per month, but the company reimburses them $0.54 per mile for the total work miles driven. If the employee drives 36,000 miles for work for the year, what will be their total employment compensation?

a.

$70,740

b.

$70,970

c.

$77,570

d.

$78,170 Which of the following companies offers the greatest total employment compensation?

Company A

Company B

Company C

Company D

Gross Pay

$37,600

$36,800

$38,100

$39,000

Paid insurance

$2,800

$2,400

$2,100

$1,800

Paid time off

$3,100

$3,600

$2,900

$2,500

Job expenses

$1,200

$600

$300

$800

a.

Company A

b.

Company B

c.

Company C

d.

Company D Four different stores have the same digital camera on sale. The original price and discounts offered by each store are listed below. Rank the stores from the cheapest to most expensive sale price of the camera.

Store A: price $99.99 and discount of 15%

Store B: price $95.99 and discount of 12%

Store C: price $90.99 and discount of 10%

Store D: price $89.99 and successive discounts of 5% and 5%

a.

A, B, C. D

b.

A, B, D, C

c.

D, A, B, C

d.

D, C, B, A Rate the following bank accounts from most to least liquid: CD, savings account, checking account, money market account.

a.

CD, savings account, checking account, money market account

b.

Savings account, checking account, CD, money market account

c.

CD, money market account, savings account, checking account

d.

Checking account, savings account, money market account, CD In 2007, the FDIC's insurance limit was $100,000 per person per bank. Approximately 62% of Gil's deposits were insured by the FDIC. Which of the following was a possible setup for Gil's deposits?

a.

A $13,000 money market account at Bank T; a $31,000 CD, $44,000 savings account, and $16,000 checking account at Bank U; a $70,000 CD and $28,000 money market account at Bank V

b.

A $54,000 checking account and $84,000 savings account at Bank T; a $28,000 money market account, $27,000 savings account, and $20,000 CD at Bank U; a $130,000 CD at bank V

c.

A $60,000 money market account and $70,000 savings account at Bank T; a $40,000 checking account and $92,000 savings account at Bank U; a $45,000 CD and $75,000 checking acount at Bank V

d.

A $108,000 savings account and $46,000 CD at Bank T; a $36,000 money market account and $38,000 CD at Bank U; a $63,000 checking account, $80,000 savings account, and $70,000 money market account at Bank V Calculate the Social Security and Medicare tax that would be applied to an annual salary of $235,430. Use $106,800 for maximum taxable earnings.

a.

Social Security tax: $1,459.67, Medicare tax: $341.37

b.

Social Security tax: $14,596.66, Medicare tax: $3,413.70

c.

Social Security tax: $662.16, Medicare tax: $341.37

d.

Social Security tax: $6,621.60, Medicare tax: $3,413.70 For each of the following wages, determine the Medicare tax that would be withheld.

i. $23,660

ii. $89,000

iii. $166,090

a.

i. $343.07

ii. $1,290.50

iii. $2,408.31

b.

i. $3,430.70

ii. $12,905.00

iii. $24,083.05

c.

i. $146.70

ii. $551.80

iii. $1,029.76

d.

i. $1,466.92

ii. $5,518.00

iii. $10,297.58 Bianca and Dave are a married couple filing a joint tax return. They have a combined gross income of $81,031 and claim four exemptions. They can make an adjustment of $2,914 for business expenses, an adjustment of $1,939 for business losses, a deduction of $4,140 for medical expenses, an adjustment of $4,825 for contributions to their retirement fund, and a deduction of $2,420 for charitable donations. If exemptions are worth $3,650 apiece and the standard deduction for a joint return is $8,350, what is their total taxable income?

a.

$50,193

b.

$41,843

c.

$48,403

d.

$52,793 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?

a.

$16,053

b.

$9,350

c.

$10,825

d.

$14,475 Nastasha has a gross income of $66,429. She can make adjustments of $14,490 for business losses, $3,584 for business expenses, and $4,813 for contributions to her retirement plan. What is Nastasha's adjusted gross income?

a.

$109,971

b.

$22,887

c.

$72,522

d.

$43,542 A combination washer/dryer costs $1,179. New parts for this washer/dryer cost $211, labor to repair it costs $553, and shipping it to and from a repair center costs $152. A full warranty, which covers all aspects of repairing the washer/dryer, costs 30% of the price of the washer/dryer. A limited warranty, which only covers labor costs, only costs 14% of the price of the washer/dryer. Assuming that the washer/dryer needs repairs which include parts, labor, and shipping, which warranty is the better deal, and by how much, rounded to the nearest dollar?

a.

The limited warranty will end up costing the consumer $189 less.

b.

The limited warranty will end up costing the consumer $363 less.

c.

The full warranty will end up costing the consumer $553 less.

d.

The full warranty will end up costing the consumer $174 less. Rachel bought 1,500 shares of Cawh Consolidated Bank at a price of $24.85 each. As the price climbed, she sold off parts of her holdings. She sold off 250 shares at $28.32 apiece, she sold 800 of her shares at $33.60 apiece, and she sold off the remainder of her shares at $39.94 apiece. If Rachel's broker charges a commission of $65 per $1,000 of stock bought or sold, how much profit did Rachel make, to the nearest dollar?

a.

$20,459

b.

$51,933

c.

$14,661

d.

$8,859 Corporate bonds from Dagofi Radar are selling at 88.354, bonds from Chambers Translation are selling at 112.894, and bonds from Essentia Inc. are selling at 96.262. If Roger wants to buy two bonds with a par value of $1,000 each from Dagofi Radar, five bonds with a par value of $500 each from Chambers Translation, and four bonds with a par value of $1,000 each from Essentia Inc., how much can he expect to spend?

a.

$8,439.91

b.

$8,500.00

c.

$2,975.10

d.

$9,343.97 Rank the following kinds of bonds in order from least secure to most secure: Municipal, Corporate, Treasury

a.

Corporate, Municipal, Treasury

b.

Treasury, Corporate, Municipal

c.

Treasury, Municipal, Corporate

d.

Municipal, Corporate, Treasury Jim wants to start investing in bonds. He checks with two brokers to ask them for suggestions of bonds to buy.

Broker J, who charges a commission of 3.6% of the market value of all bonds sold, recommends for Jim to buy three par value $500 bonds from the city of Danville, a par value $1,000 bond from Raxin Accounting, and two par value $1,000 bonds from United Rotators. Danville bonds are selling at 114.212, Raxin Accounting bonds are selling at 79.941, and United Rotators bonds are selling at 102.844.

Broker K, who charges a fee of $28 for each bond sold, recommends that Jim buy five par value $500 bonds from Fort Bend County, a par value $1,000 bond from the U.S. Treasury, and two par value $500 bonds from Iwad Records. Fort Bend bonds are selling at 91.090, Treasury bonds are selling at 101.163, and Iwad Records bonds are selling at 107.252.

Based on the current information, which broker's bond package will cost Jim less money up front, and how much less will it cost him?

a.

Broker J's suggestion will cost Jim $59.57 less than Broker K's suggestion.

b.

Broker J's suggestion will cost Jim $62.00 less than Broker K's suggestion.

c.

Broker K's suggestion will cost Jim $148.57 less than Broker J's suggestion.

d.

Broker K's suggestion will cost Jim $208.07 less than Broker J's suggestion. For the last 10 years, Megan has made regular semiannual payments of $1,624.13 into an account paying 1.5% interest, compounded semiannually. If, at the end of the 10 year period, Megan stops making deposits, transfers the balance to an account paying 2.3% interest compounded monthly, and withdraws a monthly salary for 5 years from the new account, determine the amount that she will receive per month. Round to the nearest cent.

a.

$616.39

b.

$615.21

c.

$39,079.25

d.

$39,154.16 Ethan is planning for his retirement. He has narrowed it down to two investment options. The first is an IRA where monthly payments are made, in the amount of $416.66, for 30 years. The second is a Roth IRA where annual payments are made, in the amount of $5000, for 30 years. If both compound interest at a rate of 2.5%, determine which account will yield the largest future value for Ethan, and how much greater that value will be than that of the other account. Round your final answer to the nearest cent.

a.

IRA; $3,552.72

b.

Roth IRA; $3,552.72

c.

IRA; $1,470.39

d.

Roth IRA; $1,470.39 Wayne is planning to sell the twenty-room apartment building he bought fifteen years ago, for which he paid $759,000. The real estate market in his area has been falling since that time, and the property has decreased in value by 3.8% every year. Wayne rents each of his apartments for $495 per month, and upkeep on the building costs him $26,400 annually. Assuming that Wayne has kept his apartment complex constantly three-quarters full, what will his net profit or loss be when he sells the building, to the nearest hundred dollars?

a.

$61,500 loss

b.

$722,400 loss

c.

$168,000 profit

d.

$606,000 profit Using this information, consider the three following real estate investment strategies, and rank them from least to greatest according to how much profit they would likely make in this market, assuming that each of them purchased a house in this area at year 0.

I. A house flipper, seeking to sell the house as soon as doing so becomes profitable, sells after 4 years.

II. A long-term investor, seeking to hold onto the house for a long time, sells after 23 years.

III. A moderate-term investor who will sell the house once it reaches a certain price, sells after 11 years.

a.

I, II, III

b.

II, I, III

c.

III, I, II

d.

Each of them will make roughly as much profit as the others. Joseph paid $105,000 for his home twenty years ago. Since then, his house has increased its property value by 2.0% every year. In addition, Joseph has made renovations and improvements to the house which will increase its sale value by $28,700. If Joseph sells his home, how much profit will he make, to the nearest hundred dollars?

a.

$79,700

b.

$84,700

c.

$93,700

d.

$122,400 Edward purchased his home for $89,000. For the first three years after he moved in, the real estate market was very lively, so his property value grew by 4.8% every year. For the next five years, the market slowed down somewhat, and his property value grew by 2.6% every year. How much had the value of Edward's home increased after eight years, to the nearest hundred dollars?

a.

$25,700

b.

$27,500

c.

$30,000

d.

$13,200 Five years ago, William bought a twelve-room apartment complex for $340,000, and he plans to sell it today. The real estate market caused William's complex to increase in value by 1.8% every year. William charges $525 per month to rent a room, and pays $36,500 in building upkeep every year. If William has kept all of his apartments continually rented out since he bought the building, to the nearest hundred dollars, how much profit will he realize once he sells it?

a.

$195,500

b.

$227,200

c.

$226,100

d.

$245,500 Housing expenses are commonly referred to as PITI. What does PITI stand for?

a.

principal, income, taxes, investment

b.

payment, investment, terms, insurance

c.

payment, interest, terms, income

d.

principal, interest, taxes, insurance How does the average monthly utility bill of Orlando, FL compare with the average monthly utility bill of Indianapolis, IN?

a.

The average monthly utility bill for Indianapolis, IN is $88.72 more than Orlando, FL.

b.

The average monthly utility bill for Indianapolis, IN is $85.33 more than Orlando, FL.

c.

The average monthly utility bill for Orlando, FL is $85.33 more than Indianapolis, IN.

d.

The average monthly utility bill for Orlando, FL is $88.72 more than Indianapolis, IN. ;