Midterm Review Questions

1. Midterm Review Questions Start making a note card

2. Chapter 6 - Employment • Pay periods & hourly rate • Vacation time • Piecework pay • Royalties • Social Security & Medicare

3. Chapter 6 - Employment • In 2008, Yolanda paid $3,875 in Social Security tax. If the Social Security tax rate was 6.2% to the maximum income of $94,200 that year, what was Yolanda’s taxable income? $3,875 is 6.2% of what? $3,875 = 0.062 x X = $62,500

4. Chapter 6 - Employment • In 2005, Lee began working as a nurse anesthetist with a taxable income of $100,000. The Medicare tax was 1.45% and the Social Security tax rate was 6.2% to the maximum income of $90,000 that year. How much did Lee pay in FICA tax in 2005? Total: $7,030 Medicare Social Security (100,000) (0.0145) (90,000) (0.062) X = $1,450 X = $5,580

5. Chapter 6 - Employment • Cataline works part-time at a bakery earning $9.50 an hour. In the last five days, her time card shows that she worked 3.3, 2.9, 4.0, 3.5, and 2.1 hours. What is her gross pay for the five days? Total Hours: 15.8 Gross Pay: $150.10

6. Chapter 6 - Employment • Miguel pays $25 semimonthly for health insurance, which is 20% of the total cost. His employer pays the rest. What is the total costs, to the nearest dollar, of Miguel’s health insurance? $600 per year 600 = 0.20 x X = $3,000

7. Chapter 6 - Employment • Pimmi gets paid $1.50 for the first 50 craft kits that she assembles. She earns $2.00 for each kit over 50. This week she assembled 135 kits. How much did she earn? First 50: $75 Last 85: $170 Total Pay: $245

8. Chapter 6 - Employment • Singh works at a restaurant where he is paid by the hour plus time-and-a-half for his hours over 40. Last week he worked 3 hours overtime and his gross pay was $382.70. What is his hourly wage? 40x + 3(1.5)x = 382.70 44.5x = 382.70 X = $8.60

9. Chapter 6 - Employment • Maryanne began a job that gives her 3 days of vacation each year she is employed, up to a maximum of 21 days of vacation time. How many years will it take her to reach the maximum amount of vacation time? 7 Years

10. Chapter 3 – Interest/Banking • Checking Accounts • Reconciling a check register • Savings Accounts • Simple Interest • Compound Interest • Continuously Compounding Interest • APY • Future Value of an investment

11. Chapter 3 – Interest/Banking • Conrad Savings Bank has a $25 overdraft fee. On Friday, Mr. McQuire deposited his paycheck of $468.92 bringing his account total to $712.34. The next morning, his wife wrote a check for $1,267.45 for a new refrigerator and stove. What is the balance in the McQuire account when the check for the refrigerator and stove is cleared, assuming no more money is deposited into the account? - $580.11

12. Chapter 3 – Interest/Banking • LaToya has $113.94 in her checking account. During the week she goes to an ATM and withdraws $40. She is charged a usage fee of $2.50. The following week she deposits her paycheck of $189.73. She writes two checks, one for $22.50 and the other for $70.18. What is the current balance in her checking account? $168.49

13. Chapter 3 – Interest/Banking • Amy opened a savings account with $1,500 she received for graduation. The account pays 2.4% simple interest. What is the balance after 6 months? Balance: $1,518 I = Prt I = (1,500) (0.024) (6/12) I = $18

14. Chapter 3 – Interest/Banking • What is the interest earned on $10,000 for four years, at an interest rate of 3.5% compounded continuously? B = Pe^(rt) B = (10,000) e^(4*0.035) B = $11,502.74

15. Chapter 3 – Interest/Banking • Houng deposits $5,000 into an account that earns 4% interest compounded daily. What is the annual percentage yield (APY) to the nearest hundredth percent (2 decimal places)? B = $5,204.04 APY = 4.08%

16. Chapter 3 – Interest/Banking • Jackson deposited $3,500 at 2.5% interest, compounded continuously, when he was 18 years old. How much will be in the account when he is 40 years old if he made no other deposits or withdrawals? B = $6,066.39

17. Chapter 3 – Interest/Banking • Tammy sold a diamond ring for $10,000. She placed half of the money into a CD with a 3.9% interest rate compounded daily. She placed the other half into a CD with the same interest rate which is compounded annually. What is the difference in the interest earned on each amount after 5 years? B = $44.83

18. Chapter 3 – Interest/Banking • Edward wants to have $45,000 in 6years for college. What should he deposit now into an account that pays 4.5% interest, compounded daily, to meet his goal? P = $34,352.65

19. Chapter 3 – Interest/Banking • Margarite wants to take a trip to Japan in 3 years. She knows she will need about $5,000. How much should she deposit into an account now that pays 3.5% interest compounded daily, in order to meet her goal? $4,501.65

20. Chapter 3 – Interest/Banking • Queens Meadow Bank charges a monthly maintenance fee of $15 and a check writing fee of $0.10 per check. Last month, mark wrote a total of 50 checks from his account. What was the total of all fees he paid on that account? Per Check Fee:$5 Monthly Fee: $20

21. Chapter 3 – Interest/Banking • How much more would $5,000 earn in 10 years in an account compounded continuously than an account compounded quarterly if the interest rate on both accounts is 3.7%? Continuously: $7,238.67 Quarterly: $7,226.37 Difference: $12.30

22. Chapter 4 – Consumer Credit • Saving up for an item & rounding • Down Payment • Installment Plans • Credit Score

23. Chapter 4 – Consumer Credit • Jerry buys a $5,000 motorcycle on a deferred payment plan. There is no down payment and no interest for eighteen months. Jerry must make a minimum payment of $150 a month. To avoid a retroactive APR of 21%, he must pay the balance in full before the 18 months has passed. If he pays $150 each month, how much should he pay the last month to avoid the interest charge? $ 2,450

24. Chapter 4 – Consumer Credit • Sara wants to save up to buy a new tv. The tv she wants cost $1,800.00. If Sara can save $175 a month, how long will it be before she can purchase the tv? 11 Months

25. Chapter 4 – Consumer Credit • Jesse purchases a furniture set for $2,500 on an installment plan. He must give a 15% down payment and pay a monthly fee of $151.04 for two years. How much will Jesse end up paying for the furniture set? Down Payment - $375 Monthly Payments - $3,624.96 Total Paid - $3,999.96

26. Chapter 4 – Consumer Credit • Jesse purchases a furniture set for $2,500 on an installment plan. He must give a 15% down payment and pay a monthly fee of $151.04 for two years. How much will Jesse end up paying for the furniture set? Down Payment - $375 Monthly Payments - $3,624.96 Total Paid - $3,999.96