Sales tax, unit cost, and discounts
6% or .06
What is the difference between gross income and net income?
Why is budgeting important?
Because it is the best way to plan out where your money is going and how much you can spend on things that you need and want.
What is the difference between credit cards and debit cards?
Credit cards you are borrowing money and paying it back later, debit cards you are using money that you have right now.
What is the formula for simple interest?
I = PxRxT
When comparing two items why is it best to look at the unit price and not the actual price?
Because the unit cost compares the prices to the amount of item you are getting
Federal income, FICA (social security), medicare, and state tax
Why is it not wise to have all your money budgeted out during a month?
Because there are unexpected expense that come out and if all you money is needed in other place you are out of luck
What are two benefits of each.
Credit cards: able to have money right now (do not have to wait for paycheck)
rewards (cash back)
Debit cards: Now exactly how much you are spending.
No interest charge
What is the compound interest formula?
A=P(1 + r/n)nt
If California has a sales tax of 9% and Idaho has a sales tax of 6% and you spend $24.56 how much more do you spend in California as opposed to Idaho?
$26.77 - $26.03 = $.74
If you make $10.50 and hour and work 40 hours a week. And on average there are four weeks in a month how much is your gross bi-weekly paycheck?
$840
What are fixed costs? Name three
Fixed costs are costs that you need to pay each week and the amount does not change each week. Rent, insurance, utilities
You are looking at your credit score and it is 500 is that a good score or bad? How is one way you could affect your credit score?
Which one would you want as a person PAYING interest back?
Which one would you want as a person RECEIVING interest back?
Simple interest because the interest does not increase over time.
Compound interest because the interest increases within the time frame
You are buying a weighted blanked at bed bath and beyond and the sign says it costs $99.99 but how much are you actually going to pay for that blanked? Then the cashier offers to take 20% off but you also have a $15 off coupon. Which deal to you take?
You originally will pay $105.99. You should take the 20% off which now costs $84.79 as opposed to $90.99 with the $15 off.
How much will be taken out of your weekly pay check in your boss pays you $8.00 an hour, you work 30 hours, and he tells you that he is taking out a total of 18.54% for taxes.
$44.50
In the future you are thinking about renting an apartment how much of your overall income should you expect to pay for the rent?
Between 15-33% of your monthly income
Why is it not wise to pay just the minimum on your credit card statement?
Because the banks you compound interest on your credit card payments so the more money that you still need to pay them the more money in interest you will also have to pay.
With compound interest if all the variable stay the same but the n changes from quarterly to monthly will the amount of interest increase or decrease?
Since quarterly the n=4 and monthly the n=12 the interest will increase as long as all the other variables stay the same.
You go to the store and need to buy 24 eggs:
Option 1: is 4 eggs for $0.99 (have to buy 6)
Option 2: is 12 eggs for $3.50 (have to buy 2)
Option 1 is only $0.25 per unit
Option 2 is $0.29 per unit
You get payed $12.50 an hour and week 60 hours in the month. Your boss has told you that they will take 9.90% out for federal tax, 6.2% for FICA, 1.45% for medicare. and 5% for state tax. What is your monthly net income?
$580.87
Your monthly income is $1,670 budget for these fixed costs:
Rent, Utilities, car insurance, savings, and have at least $500 left over
Answers will vary
What is the best way to deal with credit cards.
Keep track of how much you spend and do not go over the budgeted amount so you know with the next paycheck you will be able to pay off the credit card bill completely.
If you deposit $4,000 into an account paying 6% annual interest compounded quarterly, how much money will be in the account after 5 years.
A = 4000(1 + .06/4)4x5
A = $5,387.42