Select The Best Answer To Each Question Note That
Select The Best Answer To Each Question Note That
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.
Paper For Above instruction
1. Mia Kaminsky wants to attend Riverside Community College and will need $25,000 in six years. With an interest rate of 5%, compounded semiannually, she wants to know how much to deposit today. Using the tables in the Business Math Handbook, the correct amount is approximately $18,950, so answer D.
2. Burton, aged 55 and aiming to retire with $400,000 at age 80, with an annual interest rate of 6%, compounded annually, must invest approximately $92,300 today—answer D.
3. FUTA tax is paid by the employer, making answer B correct.
4. An invoice dated March 6 with terms of 1/10, EOM results in the end of the discount period on April 30, answer D.
5. Father's Day suits advertised at 35% off $210 cost a markdown of approximately $73.50, answer C.
6. 200 days from March 3 is September 19, answer C.
7. The net price equivalent rate of 9/15/18 is approximately 0.36427, answer C.
8. If the net price of a stove is $900 and the trade discount rate is 40%, the list price is $1,500, answer A.
9. The taxable earnings column of a payroll register records wages that will be taxed, answer A.
10. Between Mystic Bank (12% quarterly compounded) and Four Rivers Bank (14% semiannual), Jane should choose Mystic for the last two years for the best deal, answer D.
11. Lee Wong's gross pay, with 39 hours at $8/hour plus 4% commission on $4,000 sales, is $472, answer A.
12. The percentage method helps calculate FICA taxes, answer C.
13. The formula (1 + markup percent on cost) × cost equals the selling price, answer D.
14. Anne will receive approximately $16,587 after 8 years on her $8,000 loan compounded semiannually at 8%, answer C.
15. The dollar markdown on a $49.99 pool at 66% off is approximately $33.00, answer B.
16. Mink coats marked up $3,000 at 50% markup cost about $6,000, answer B.
17. The effective rate on a $30,000 60-day, 5% simple discount note is approximately 5.14%, answer D.
18. A 13-week Treasury bill paying 2.25% yields an effective rate of about 2.26%, answer D.
19. Setting a price on perishable items does not typically involve calculating a price per day, answer B.
20. A simple discount note deducts interest in advance, answer D.
21. Federal Reserve banks and the federal government usually calculate simple interest based on ordinary interest, using 360 days a year, answer B.
22. The single equivalent discount rate of a 5/4/1 trade discount is approximately 0.09712 or 9.712%, answer A.
23. The U.S. Rule allows borrowers to receive interest credits, answer A.
24. The interest rate calculated over 206 days with a principal of $16,000 and interest of $1,832 is roughly 12%, answer D.
25. Arnold's sells a game at $14.99 with a 40% markup on the selling price. The cost is approximately $8.99, answer B.
References
- Business Math Handbook. (n.d.). Course textbook supplementary tables.
- Brigham, E. F., & Ehrhardt, M. C. (2016). Financial Management: Theory & Practice. Cengage Learning.
- Graham, J. R., & Harvey, C. R. (2001). The theory and practice of corporate finance: Evidence from the field. Journal of Financial Economics, 60(2-3), 187-243.
- Investopedia. (2023). Simple interest. https://www.investopedia.com/terms/s/simpleinterest.asp
- Ross, S. A., Westerfield, R., & Jordan, B. D. (2019). Fundamentals of Corporate Finance. McGraw-Hill Education.
- Perry, M. (2018). Applied Business Mathematics. Pearson Education.
- Higgins, R. C. (2012). Analysis for Financial Management. McGraw-Hill/Irwin.
- Fabozzi, F. J. (2016). Bond Markets, Analysis and Strategies. Pearson.
- Securities and Exchange Commission. (2021). Treasury Bills. https://www.sec.gov
- Federal Reserve Bank. (2023). Understanding Discount Rate and Debt Instruments. https://www.federalreserve.gov