Test 5 chapters 12 and 13 study guide

Don't forget to use these links: 

The McGraw-Hill website is a great utility for these tests and the final exam.

http://highered.mcgraw-hill.com/sites/0073137677/student_view0/chapter12/multiple_choice_quiz.html

http://slater1.pageout.net/page.dyn/instructor/assessment/display_assessment?quiz_id=488732

http://slater1.pageout.net/page.dyn/instructor/assessment/display_assessment?quiz_id=34693

http://highered.mcgraw-hill.com/sites/0073137677/student_view0/chapter13/post-test.html

The answers are in Bold and underlined. 

1. At the beginning of each year, Bill Ross invests $1,400 semi-annually at 8 percent for 9 years. The cash value of the annuity due at the end of the ninth year is: (Use the tables in the handbook)
A. $38,739.68
B. $37,399.68
C. $37,939.86
D. $37,339.68
E. None of these

$1,400 x 27.6712 = $38,739.68 - 1,400.00 = $37,339.18

 

2. Joe Sullivan invests $9,000 at the end of each year for 20 years. The rate of interest Joe gets is 8 percent annually. The final value of Joe's investment at the end of the 20^th year on this ordinary annuity: (Use the tables in the handbook)
A. $411,588.00
B. $88,362.90
C. $411,858.00
D. $88,632.90
E. None of these

$9,000 x 45,7620 = $411,858

 

3. Al Miler, owner of Al's Garage, estimates that he will need $29,000 for new equipment in 15 years. Al decided that he would put aside the money now so that in 15 years the $29,000 will be available. His bank offers him 10 percent interest compounded semiannually. (Use the tables in the handbook) Al must invest today:
A. $6,710.60
B. $6,942.60
C. $6,701.60
D. $125,335.10
E. None of these

$29,000 x .2314 = $6,710.60

 

5. The bank discount of a $18,000 non-interest-bearing, simple discount 8 percent, 90-day note is:
A. $18,360
B. $17,640
C. $630
D. $360
E. None of these

$18,000 x .08 x 90/360 = $360

 

6. The effective rate of a $30,000 non-interest-bearing simple discount 5 percent, 60-day note is:
A. 5 percent
B. 5.04 percent
C. 6.0 percent
D. 5.14 percent
E. None of these

$250/($29,750 x (60/360)) = 5.04%

 

7. By using the table in handbook, the value of $60 deposited in a bank for six years at a rate of 10 percent compounded annually is:
A. $96.63
B. $96.36
C. $106.30
D. $106.03
E. None of these

60 x 1.7716 = $106.30

 

8. Anne Katz, owner of Katz Sport Shop, loans $8,000 to Shelley Slater to help her open an art shop. Shelley plans to repay Anne at the end of 8 years with interest compounded semiannually at 8 percent. At the end of 8 years, Anne will receive: (Use the tables in the handbook)
A. $14,984
B. $16,857
C. $16,587
D. $14,484
E. None of these

$8,000 x 1.8730 = $14,984

 

9. A note dated August 18 and due on March 9 runs for exactly:
A. 230 days
B. 227 days
C. 272 days
D. 203 days
E. None of these

365 - 230 + 68 = 203

 

11. Lee Associates borrowed $60,000. The company plans to set up a sinking fund that will pay back the loan at the end of 12 years. Assuming a rate of 8 percent compounded semiannually, the amount to be paid into the fund each period is: (Use the tables in the handbook)
A. $1,350
B. $1,536
C. $1,653
D. $5,163
E. None of these

$60,000 x .0256 = $1,536

 

12. Dan Miller bought a new Toyota truck for $28,000. Dan put a down payment of $6,000 and paid $390 monthly for 70 months. The total finance charge:
A. $13,300
B. $5,300
C. $11,300
D. $27,300
E. None of these

$27,300 - 22,000 = $5,300

 

13. Justin Chan bought a Scion car for a price of $8,200 putting down $800 and financing the remainder with 60 monthly payments at $179.99. The APR by table look-up is: (Use the tables in the handbook)
A. Close to 15 percent
B. Close to 14 percent
C. Close to 13 ½ percent
D. Between 16.00 and 16.25 percent
E. None of these

60 x $179.99 = $10,799.40 - 7,400.00 = $3,399.40 $3,399.40/$7,400.00 = 45.93® close to 15%

14. Russell Ray bought a plasma television with $200 down and 60 equal monthly installments of $210. The total purchase price (cash price) of the televisions was $12,000. Russell decided to pay off the bill after the 10^th payment. Russell is entitled to a rebate of: (Use the tables in the handbook)
A. $104.10
B. $208.10
C. $140.11
D. $280.22
E. None of these

 

15. Marsha Terban bought a home for $119,000 with a down payment of $19,000. Her rate of interest is 12 1/2 percent for 35 years. The balance of mortgage at end of 1^st month is:
A. $3.33
B. $98,944
C. $99,669.76
D. $99,985.67
E. None of these

$100,000 - 14.33 = $99,985.67

 

16. Given selling price $140,000; 20 percent down payment; 10 ½ percent for 25 years:
Calculate:
A. Amount of mortgage
B. Monthly payment
C. Interest portion of 1st payment
D. Principal portion of 1st payment
A. ________________
B. ________________
C. ________________
D. ________________ 

A. $112,000; B. $l,058.40; C. $980; D. $78.40

Feedback: A. $140,000 x .80 = $112,000
B.112 x 9.45 = $1,058.40
C.$112,000 x .105 x 1/12 = $980
D. $1,058.40 - 980 = $78.40

 

17. From the following: Calculate (a) Net Sales (b) Gross Profit (c) Total Operating Expenses (d) Net Income Sales Returns $700; Rent expense $1,288; Sales Discounts $950; Depreciation Expense $600; Cost of Merchandise Sold $7,600; Gross Sales $20,900; Advertising Expense $1,650; Salary Expense $2,900; Heat Expense $900.
A. _______________
B. _______________
C. _______________
D. _______________ 

A. $19,250; B. $11,650; C. $7,338; D. $4,312

Feedback: A. $19,250 ($20,900 - $700 -$950)
B. $11,650 ($19,250 - $7,600)
C. $7,338 ($1,288 + $600 + $1,650 = $2,900 + $900)
D. $4,312 ($11,650 - $7,338)

18. Complete
 
A. _______________
B. _______________
C. _______________
D. _______________
E. _______________ 

A. $54,000; B. 22.22%; C. 16.67%; D. 9.26%; E. 51.85%

Feedback: A. $54,000
B. 22.22% ($12,000/$54,000)
C. 16.67% ($9,000/$54,000)
D. 9.26% ($5,000/$54,000)
E. 51.85% ($28,000/$54,000)

 

19. Solve for (A) current ratio (B) acid test (C) average day's collection (D) asset turnover (E) profit margin on sales. (Round to nearest hundredth or hundredth percent, as needed.)
 
A. _______________
B. _______________
C. _______________
D. _______________
E. _______________ 

A. 1.58; B. 1.33; C. 28 days; D. 1.37; E. 15.38%

Feedback: A. $26,000/$16,500 = 1.58
B. ($26,000 -$4,100)/$16,500 = 1.33
C. $4,100/144.44 = 28 days
D. $52,000/38,000 = = 1.37
E. $8,000/$52,000 = 15.38%

21. Abby Kaminsky, age 32, has decided to take out a limited payment life policy. She chose this since she expects her income to decline in future years. Abby has decided to take out a twenty-year pay life policy with a coverage amount of $200,000. By using the tables in the handbook, her annual premium will be:
A. $1,158
B. $2,316
C. $2,136
D. $1,518
E. None of these

200 x $11.58 = $2,316

 

22. Howard Hane had taken out a $130,000 fire insurance policy for his new restaurant at a rate of $.82 per $100. Nine months later, Howard canceled the policy and decided to move his store to a new location. The cost of premium to Howard is: (Use the table in the handbook)
A. $1,066
B. $863.46
C. $1,606
D. $836.64
E. None of these

1,066 x .81 = $863.46

 

23. Given the following information, as well as using the tables in the handbook, the total annual premium is:
Sam Montgomery - Territory 5
Classified Driver 17
Car Age 4 Symbol 5
State has compulsory insurance and the following options:
  
A. $791
B. $918
C. $971
D. $298
E. None of these

$258 + $298 + $164 + $56 + $142 = $918

 

24. Jim's Donut Shop reported the following sales for the first 20 days:
 
1st complete a frequency distribution. 

Feedback: $100 = 7, 200 = 4, 300 = 3, 400 = 4, 500 = 2

 

25. Hector Rameriz received 3 A's and one B in his college courses. What is his grade point average? Assume each course is 3 credits. A = 4, B = 3, C = 2, D = 1
A. 3.0
B. 3.25
C. 3.75
D. 3.80
E. None of these

45/12 = 3.75

 

26. Find the A) mean B) Median C) Mode
18 25 16 29 38 18 

A. 24, B. 21.5, C. 18
 

Feedback: A: (18 + 25 + 16 + 29 + 38 + 38)/6 = 24
B: 18 + 25/2 = 21.5
C: 18

 

27. Today, a new Ford cost $24,000. In 1970, the Ford cost $6,000. What is the price relative? 

$400
 

Feedback: ($24,000/$6,000) x 100 = 400

 

28. Calculate the standard deviation (to nearest hundredth) for the following sample set of data.
80, 92, 59, 46, 82, 74 

1st sort your data and find the data-mean
 

Feedback: 1,412.84/(6-1) = 282.57 = 16.81 Standard Deviation

Test 6 on Chapters 14, 15 and 19

• Question 1

	Ed Sloan bought a new Explorer for $22,000. He put down $7,000 and paid $290 for 60 months. The total finance charge to Ed is:
	Answer:    $2,400

• Question 2

	Russell Ray bought a plasma television with $200 down and 60 equal monthly installments of $210. The total purchase price (cash price) of the televisions was $12,000. Russell decided to pay off the bill after the 10th payment. Russell is entitled to a rebate of: (Use the tables in the handbook)
	Answer:    None of these

• Question 3

	Which one of the following statements is incorrect?
	Answer:    The Truth in Lending Act regulates interest charges

• Question 4

	Amount financed is equal to:
	Answer:    Cash price less down payment

• Question 5

	Open credit in a revolving charge plan results in:
	Answer:    As many charge purchases till credit limit is reached

• Question 6

	The APR represents the:
	Answer:    True effective annual rate of interest charged by seller

• Question 7

	Mia Lane bought a high definition television for $7,500. Based on her income, she could only afford to pay back $600 per month. There is 1 ½ percent monthly interest charge on the unpaid balance. The U.S. Rule is used in the calculation. At the end of month one, the balance outstanding is:
	Answer:    None of these

• Question 8

	Bill Moore took out an $80,000 mortgage on a ski chalet. The bank charged 4 points at closing. The points in dollars cost Bill:
	Answer:    $3,200

• Question 9

	Dick Hercher bought a home in Homewood, Illinois for $230,000. He put down 20 percent and obtained a mortgage for 25 years at 8 percent. The total interest cost of the loan is:
	Answer:    $242,144

• Question 10

	The total cost of interest is equal to the total of all monthly payments:
	Answer:    Less amount of mortgage

• Question 11

	Stu Reese has a $150,000 7 ½ percent mortgage. His monthly payment is $1,010.10. His first payment will reduce the principal to an outstanding balance of:
	Answer:   $149,927.40

• Question 12

	An amortization schedule shows:
	Answer:    Portion of payment broken down to interest and principal

• Question 13

	Jill Diamond bought a home for $190,000 with a down payment of $65,000. The rate of interest was 7 percent for 35 years. Her monthly mortgage payment is:
	Answer:   $798.75

• Question 14

	Craig Hammer purchased a new condominium for $225,000. The bank required a $30,000 down. Assuming a rate of 8 percent on a 25 year mortgage, Craig's monthly payment is: (Use the table in the handbook)
	Answer:    $1,505.40

• Question 15

	A tax rate of $.0711 in decimal expressed per $1,000 of assessed valuation is equal to:
	Answer:    $71.1

• Question 16

	Assessed valuation is equal to the assessment rate:
	Answer:    Times the market value

• Question 17

	In the community of Borg, the market value of a home is $190,000. If the assessment rate is 45 percent, the assessed value is:
	Answer:    $85,500

• Question 18  

	The building of Jim's Hardware is assessed at $109,000. The tax rate is $86.95 per $1,000 of assessed valuation. The tax due is:
	Answer:    $9,477.55

• Question 19

	Sales tax is taken on:
	Answer:    Selling price less trade discount

• Question 20

	Jen Rich bought a new Toyota for $18,200 that included a 5 percent sales tax. The actual cost of the car (round to nearest dollar) before the tax is:
	Answer:    $17,333 I apologize to you all, but I do not have test 5 on chapters 12 and 13. I will post a study guide that I used instead.  Good luck everyone on your upcoming exams and thank you for visiting my blog.