Exam: 060321RR - Business and Finance Basics I

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Questions 1 to 25: Select the best answer to each question. Note that a question and its answers may be split across a page break, so be sure that you have seen the entire question and all the answers before choosing an answer.

1. A $120,000, 5%, 200-day note dated June 6 is discounted on October 8. The discount period is

_______ days.

A. 67

B. 124

C. 76

D. 142

2. 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. $15,000.

B. $2,500.

C. $15,500.

D. $15,625.

3. At the end of the summer, Walgreens advertised blow-up pools for 66% off the regular price. Jeff Jones saw a pool with a regular price of $49.99. What is the dollar markdown?

A. $33.99

B. $39.29

C. $33.39

D. $32.99

4. A simple discount note results in

A. interest that's deducted in advance.

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

C. lower interest costs than a simple interest note.

D. interest that's deducted when note is paid back.

5. 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. Four Rivers

B. Mystic for last two years

C. Mystic

D. Four Rivers for first two years

6. Mia Kaminsky wants to attend Riverside Community College. She'll need to have $25,000 six years from today. Mia is wondering what she'll have to put in the bank today so that she'll have $25,000 six years from now. Her bank pays 5% compounded semiannually. Using the tables in the Business Math

Handbook that accompanies the course textbook, determine the amount Mia needs to deposit today.

A. $18,590

B. $18,950

C. $33,226

D. $33,622

7. Differential pay schedule is based on

A. FUTA.

B. FICA.

C. different levels of performance.

D. gross pay.

8. What is the single equivalent discount rate of the trade discount 5/4/1?

A. .99998

B. .90288

C. .00002

D. .09712

9. Jay discounts a 100-day note for $25,000 at 13%. The effective rate of interest to the nearest hundredth percent is _______ %.

A. 13.02

B. 13.03

C. 13.49

D. 13.48

10. Fathers' Day suits were advertised for 35% off the regular price. A suit regularly sells for $210. What is the amount of markdown?

A. $136.50

B. $163.50

C. $37.50

D. $73.50

11. When markups are based on the selling price, the selling price is

A. 100% + cost percent.

B. 100%.

C. cost – markup.

D. the portion.

12. 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. 9.00%

C. 8.16%

D. 8.17%

13. What is the net price equivalent rate of 9/15/18?

A. .63427

B. .36573

C. .63573

D. .36427

14. An Apple iPad sells for $699.00 on eBay. The markup is 30% on cost. What is the total cost of the iPad sold on eBay?

A. $537.69

B. $489.30

C. $ 490.00

D. $908.70

15. 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. $180.00

B. $186.00

C. $57.66

D. $155.00

16. The effective rate of a $25,000 non-interest-bearing simple discount 10%, 90-day note is

A. 10.8%.

B. 10%.

C. 10.26%.

D. 10.62%.

17. 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. $3,600.

C. $2,250.

D. $1,260.

18. A video game sells at Arnolds for $14.99. Arnold's marks the game up at 40% of the selling price.

What is the cost of the game to Arnold?

A. $8.99

B. $6.00

C. $6.50

D. $9.10

19. 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. $92,300

B. $69,900

C. $93,200

D. $96,500

20. In calculating the bank discount when discounting an interest-bearing note, which one of the following is not used in the calculation?

A. Principal proceeds

B. Bank discount rate

C. Discount period

D. Maturity value

21. 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. $246.42

B. $113.22

C. $179.82

D. $220.00

22. What is the effective rate of a $30,000 non-interest-bearing simple discount 5%, 60-day note?

A. 6.0%

B. 5.14%

C. 5%

D. 5.04%

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. $472.

B. $312.

C. $427.

D. $321.

24. 200 days from March 3 is

A. September 17.

B. September 18.

C. September 20.

D. September 19.

25. 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. $61.84

B. $68.31

C. $86.31

D. $61.48

End of exam