Many credit card companies charge a compound interest rate of 1.8% per month on a credit card balance. Miriam owes $650 on a credit card. If she makes no purchases or payments, she will go more and more into debt. Which of the following sequences best describes her increasing monthly balances? A. 650.00, 767.00, 884.00, 1,001.00, 1,118.00, … B. 650.00, 661.70, 673.40, 685.10, 696.80, … C. 650.00, 661.70, 673.61, 685.74, 698.08, … D. 650.00, 650.18, 650.36, 650.54, 650.72, … E. 650.00, 767.00, 905.06, 1,067.97, 1,260.21, …
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1. The investment you make into a start=up company is also known as ____ . A. Venture Capital B. first-time investment C. entrepreneurial capital D. beginning capital 2. The correct order for saving should be ___. A. Emergency fund, retirements, pay off credit debts B. Retirements, emergency fund, pay off credit debts C. Pay off credit debt, emergency fund, and retirements D. Pay off credit debt, retirements, emergency fund 3. Investing in stock plans is ____. A. Low risk B. High risk C. FDIC protected D. A set increase in your original investment 4. To place savings into different types of saving instruments is to A. Split invest B. Diversify C. Divide invest D. Dilute your investing power 5. Purchasing a home usually requires ____ for the down payment. A. A loan B. A lump sum C. A credit account D. Nothing 6. Which of the following is not an example of a contract? A. Credit card B. Rental C. Lease D. Borrowing lunch money 7. Gains and losses on investments are also known as ____. A. Nets gains B. Return on investment C. Net investments D. Investment reward 8. The United States Treasury issues ___ for you to purchase. A. Grantor bonds B. Savings instruments C. Savings bonds D. Treasury instruments 9. You want to buy a used car for $8,648.00 plus 4.7% sales tax. You want to make a 5% down payment. How much is your down payment? 10. You want to buy a house in 9 years. The estimated cost is $175,800.00. You want to make a 20% down payment and closing costs are 7%. How much in total do you need save each month to reach your goal if you cover closing costs and the down payment? 11. You have a part time job that pays $4.70/hr and average tip are $3.85/hr. Your deductions are FICA (7.65%), Federal tax withholding (12.3%), and state tax withholding (8.2%). You worked 13 hr/wk. You save 15% of your realized income each week. How much do you save per month? 12. You invest $1,050.00, buying stock in a company at $10.00/share. The shares increase in value by 13% the first year and decrease by 5% the second year. How much is the total value of your stocks in the second year? 13. You invest $2000 in a stock plan and another $2000 into a savings account. The stock plan decreases by 7% the first year and gains 10% the second year. A savings account earns 3.7% APR and compounds annually. What is the difference in earnings between the stock and savings account the end of the second year? 14. Your parents are renting an apartment for you when you go away to college. An annual contract as $502 a month with a two month penalty if you break the lease. The month to month contract is $615 a month. How much is the difference and payments is you stay the whole year? 15. Using the information from number 14, you leave after six months. How much is the difference in that amount paid between the two contracts? 16. You have direct deposit. Your job pays $8.55 an hour and you were 15 hours per week. Your deductions are FICA (7.65%), Federal tax withholding (10.4%), and state withholding (7.7%). How much is deposited by – weekly? 17. You have housing and fixed expenses of $631.72/month and they are 33% of your realized income. What is a realized income per month? 18. You had housing and fixed expenses of $813.52/month. You want to have a 6-month emergency fund and you want to have funded in 18 months. How much must you save per month? 19. You have $5000 and invest 60% of it in stocks while leaving the rest in a savings account earning a 4.9% APR. The stock increases 9% in the first year and loses 4% of its value the second year. What is the total amount gained during the two years? What would the gain have been if all of the investment have been left in the savings account? 20. You want to purchase the house in 10 years. You estimate the cost will be $184,500. You want to make a 20% down payment and pay closing costs, which are 8.5%. How much of the down payment and closing costs? How much do you need to save each month to reach your goal?