Personal Finances
Simple and Compound Interest
Savings Plan and Loan Repayment
Income Tax
Miscellaneous
100
Sue enjoys her coffee. She spends $7.50 per day at the coffee shop each weekday. She brews her own on the weekends and spends $40 a month on the ground coffee. How much is Sue spending annually on coffee?
(1 month = 4 weeks)
$2430
100
Suppose that you invest $4200 in an account that earns simple interest at an APR of 5.2%. Determine the accumulated balance after 5 years.
$5292.00
100
Calculate the monthly payments for a home mortgage of $98,000 with a fixed APR of 6.25% for 30 years.
$603.40
100
Mark is single and earned wages of $52,000 in 2013. He received $4300 in interest from savings accounts, he contributed $1200 to a tax-deferred retirement plan, and he took the standard deduction. Find his adjusted gross income.
$55,100
100
Three years after paying $11,500 for some shares of a risky stock, you sell the shares for $7000. Find the total return (to the nearest hundredth of a percent) on your investment.
–39.13%
200
Compute the annual cost of each of the following expenses: $14 a week on snacks; $125 per month on pet supplies. Complete the sentence: On an annual basis, the first set of expenses is _______% of the second set of expenses.
(1 month = 4 weeks)
48.5%
200
Suppose that you invest $23,000 in an account that earns interest at an APR of 3.2%, compounded annually. Determine the accumulated balance after 8 years.
$29,591.39
200
Suppose you set up a new IRA (individual retirement account) that pays an APR of 8.2%, compounded monthly. If you contribute $130 per month for 11 years, how much will the IRA contain at the end of that time?
$27,718.12
200
Suppose a married couple with no dependents filed jointly and had a taxable income of $102,000 in 2013. How much income tax did they pay?
$17,357.50
200
Six years after buying 250 shares of a certain stock for $38 per share, you sell the stock for $15,000. Find the annual return (to the nearest hundredth of a percent) on your investment.
7.91%
300
Mike has an annual expense of $846 for life insurance, a semi-annual car insurance premium of $750, and monthly charges of $90 for health insurance. On average, how much does he spend per month?
$285.50
300
Suppose that you invest $5873 in an account that earns interest at an APR of 4.4%, compounded monthly. Determine the accumulated balance after 7 years.
$7986.90
300
Suppose that you are 26 years old now, and you would like to retire at the age of 63. Furthermore, you would like to have a retirement fund from which you can draw an income of $65,000 per year until the age of 95! You plan to reach this goal by making monthly deposits into an investment plan. How much do you need to deposit each month? Assume an APR of 5%.
$1624.36
300
Suppose that you are a single taxpayer, and you earned $54,500 from wages in 2013. You had no other income, you made no contributions to retirement plans, and you took the standard deduction. How much did you owe in FICA (7.65%) and income taxes combined?
$11,223
300
What does "n" represent?
The number of times an interest rate is being compounded per year.
400
Find the net monthly cash flow.
(1 month = 4 weeks)
(1 year = 2 semesters)
$805
400
Suppose that you invest $1600 in an account that earns interest at an APR of 7.4%, compounded continuously. Determine the accumulated balance after 6 years.
$2494.29
400
Suppose you apply for a 7-year loan in the amount of $17,000 with an APR of 10%. Your monthly payment is $282.22. Determine the total amount of interest paid over the seven years.
$6706.48
400
Suppose that you are a head of household with one dependent child, and you had a taxable income of $53,600 in 2013. Assuming you are entitled to the $1000 tax credit for your child, how much income tax did you pay?
$6902.50
400
What is the difference between a tax credit and a tax exemption?
A tax exemption is taken off of annual gross income to reduce tax liability. A tax credit reduces the final amount of taxes owed.
500
Tom is 45 and pays $2142 on his mortgage each month while his total take-home pay is $5950 per month. The national average, for those aged 35 – 64, on housing costs is 35% of income. What percent of Tom’s income does he spend on housing? Is this more or less than the national average?
Tom spends 36% of his income on housing, more than the 35% average
500
If you invest $500 at an APR of 4.5%, compounded quarterly, how much will you have after 36 months?
$571.84
500
Suppose you have a balance of $2600 on your credit card, which charges an APR of 20%. If you want to pay off the balance in 15 months, how much should you pay each month? Assume that you charge no additional expenses to the card.
$197.33
500
Explain the difference between gross income, adjusted gross income, and taxable income.
Gross income is the total amount someone made in a year.
Adjusted gross income is the total amount they made, minus any tax-exempt investments or payments.
Taxable income is adjusted gross income minus any applicable deductions or exemptions, and is the number via which federal taxes are computed.