Question description

 

 1. How do Federal Reserve banks, as well as the federal government, typically calculate simple interest? A. Using 30 days in each month

B. Based on ordinary interest  C. Using 31 days in each month

D. Based on exact interest 

2. The taxable earnings column of a payroll register records A. the actual tax.B. the estimated tax.C. wages, actual tax, and estimated tax.  D. what wages will be taxed. 

3. An invoice dated March 6 with terms of 1/10, EOM results in the end of the discount period onA. April 10.B. May 30.C. May 31.D. April 30. 

4. To date, Jay Ward has cumulative earnings of $107,600. This week he is paid $3,000. What is the total amount of Social Security tax for this week? Assume a rate of 6.2% on $110,100 for Social Security and 1.45% for Medicare. A. $186.00B. $155.00C. $57.66D. $180.00

   5. The percentage method aids in calculating A. SUTA.  B. FUTA.C. FIT.D. FICA.

 6. Jane is having difficulty deciding whether to put her savings in the Mystic Bank or in the Four Rivers Bank. Mystic offers a 12% rate compounded quarterly, and Four Rivers offers 14% compounded semiannually. Jane has $40,000 to invest and expects to withdraw the money at the end of five years. Using the tables in the Business Math Handbook that accompanies the course textbook, determine which one of the following is the best deal

.A. MysticB. Four RiversC. Mystic for last two years  D. Four Rivers for first two years 

7. When markups are based on the selling price, the selling price is A. the portion.B. 100% + cost percent.  C. cost – markup.D. 100%.

 8. Which one of the following statements is true about the U.S. Rule? A. It's used by only banks.B. It's never used by banks.C. It's hardly used today.  D. It allows borrowers to receive interest credit. 

9. FUTA tax is paid A. by the employer.B. by an employee.C. by both the employee and the employer.D. only weekly. 

  10. A local college bookstore paid a net price of $12,500 for textbooks for the coming semester. The publisher offered a trade discount of 20%. The publisher's original list price was A. $2,500.  B. $15,625.C. $15,000.D. $15,500.

 11. Fathers' Day suits were advertised for 35% off the regular price. A suit regularly sells for $210. What is the amount of markdown? A. $37.50B. $73.50C. $163.50D. $136.50

 12. A $120,000, 5%, 200-day note dated June 6 is discounted on October 8. The discount period is _______ days. A. 67  B. 142C. 76D. 124 

13. Anne Katz, the owner of Katz Sport Shop, lends $8,000 to Shelley Slater to help her open an art shop. Shelley plans to repay Anne at the end of eight years with interest compounded semiannually at 8%. Using the tables in the Business Math Handbook that accompanies the course textbook, you can determine that at the end of eight years Anne will receive A. $14,984.B. $16,587.C. $14,484.  D. $16,857.

 14. A local Dot Dress Shop is selling a suit for $99. Because of changing styles, the first markdown was 8% and second markdown was 25%. The suit still did not sell, so a final markdown of 10% was taken. What is the current sale price?A. $61.48B. $61.84C. $68.31D. $86.31 

15. What is the effective interest rate of an 8% 13-week Treasury bill? Assume it is a $10,000 Treasury bill, and round your answer to the nearest hundredth percent. A. 8.20%B. 8.17%C. 8.16%D. 9.00%   

16. Jill Ley took out a loan for $60,000 to pay for her child's education. The loan must be repaid at the end of eight years in one payment with interest of 6%. The total amount Jill has to pay back at the end of the loan is A. $80,800.B. $88,800.C. $28,800.  D. $88,008.

 17. Johnny Mac's Sporting Goods bought a baseball glove from Rawlings Sporting Goods for $66.00. They want to mark up the glove 70% on selling price. What should Johnny's sell the glove for?A. $113.22B. $246.42C. $220.00D. $179.82 

18. If the net price of a stove is $900 and the trade discount rate is 40%, then the list price is A. $1,500.B. $1,260.  C. $3,600.D. $2,250. 

19. 200 days from March 3 is

A. September 19.B. September 20.C. September 17.D. September 18.

 20. Setting a price on perishable items does not include calculatingA. a selling price per dozen.B. the total selling price.C. a selling price per day.D. the total cost.

 21. Jay discounts a 100-day note for $25,000 at 13%. The effective rate of interest to the nearest hundredth percent is _______ %. A. 13.49B. 13.03  C. 13.02D. 13.48 

22. Burton Bush wants to retire in Arizona when he is 80 years of age. Burton, who is now 55, believes he will need $400,000 to retire comfortably. To date, he has set aside no retirement money. If he gets an interest rate of 6% compounded annually, he will have to invest today. Using the tables in the Business Math Handbook that accompanies the course textbook, determine how much he must invest.A. $69,900 B. $92,300 C. $96,500 D.  $93,200 23.  Lee Wong is a sales clerk at Sears. She is paid $8.00 per hour plus a commission of 4% on all sales. Assuming Lee works 39 hours and has sales of $4,000, her gross pay is A. B. C. D.  $321.  $472.  $427.  $312.

 24. A.  What is the single equivalent discount rate of the trade discount 5/4/1?  .99998 B. C. D.  .00002  .90288  .09712

 25.  A simple discount note results in 

A.  interest that's deducted when note is paid back. B.interest that's deducted in advance. 

c. lower interest costs than a simple interest note.

d.  the same interest costs as a simple interest note.