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Chapter Tests             01  02  03  04  05  06  07  08  09  10  11  12  13  14  15  16 17 18  19  20  21  22                 Unit Test 01  02  03  04  05  06        

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FUTA tax is paid:
 
A. By an employee
B. By the employer
C. By both the employee and the employer
D. Only weekly
E. None of these
   
Differential pay schedule is based on:
 
A. FICA
B. Different levels of performance
C. FUTA
D. Gross pay
E. None of these
   
A merit rating system for SUTA means:
 
A. Rates cannot change
B. State rates will always be lower
C. Rate varies with employment record
D. FUTA will increase
E. None of these
   
Mindy makes boots for Belleville Boot Factory. She is paid on the following differential pay scale:
 

• 1-50 = $1.65
• 51-150 = $3.30
• 151-200 =$4.95
• Over 200 = $6.00

 
What is Mindy's pay if she produced 192 boots for the week?
 
A. $602.30
B. $702.90
C. $1,152.00
D. $620.30
E. None of these ($620.40)
   
Leo Corporation pays its employees on a graduated commission scale: 6% on the first $40,000 in sales,
7% on sales from $40,000 to $80,000, and 9% on sales greater than $80,000. Bernie Kaminsky had sales of $105,000.
His commission is:
 
A. $2,400
B. $7,450
C. $5,200
D. $1,350
E. None of these
   
John Flynn works at Stutz Toyota and is paid a(n) __________ against his earned commissions.
 
A. Bonus to one's salary
B. Salary
C. Draw
D. Amount that is never paid back
E. None of these
   
Jim Ross is an automobile salesman who receives a salary of $500 per week plus a commission of 3% on all sales.
During a four-week period he sold $42,000 worth of cars. What were Jim's average earnings?
 
A. $404
B. $1,760
C. $1,670
D. $440
E. None of these ($1,260 in commission)
 

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Chapter Tests             01  02  03  04  05  06  07  08  09  10  11  12  13  14  15  16 17 18  19  20  21  22                 Unit Test 01  02  03  04  05  06        
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The more allowances claimed on Form W-4:
 
A. The less money deducted for FIT
B. The more money deducted for FIT
C. No FIT ever deducted
D. FUTA increase
E. All of these
   
Percentage method tables can show:
 
A. Weekly period rates
B. Biweekly payroll rates
C. Semimonthly payroll rates
D. Monthly payroll rates
E. All of these
   
FICA tax base:
 
A. Changes every quarter
B. Rarely changes
C. Changes once every two years
D. Is never more than $60,000
E. Always more than $60,000
   
Interest on $5,255 at 12% for 30 days (use ordinary interest) is:
 
A. $52.55
B. $55.25
C. $5.26
D. $5.25
E. None of these
   
Which of the following is not true of the U.S. Rule?
 
A. Calculate interest on principal from date of loan to date of first payment
B. Allows borrower to receive proper interest credits
C. Can use 360 days in its calculations
D. Can involve more than one payment before maturity date
E. None of these
   
On May 17, Jane took out a loan for $33,000 at 6% to open her law practice office. The loan will mature the following year
on January 16. Using the ordinary interest method, what is the maturity value due on January 16?
 
A. $34,342
B. $34,320
C. $34,323.62
D. $34,254
E. None of these
   
Simple interest usually represents a loan of:
 
A. One month or less
B. One year or less
C. Two years or less
D. Six months or less
E. None of these
   
Joe Flynn visits his local bank to see how long it will take for $1,200 to amount to $2,100 at a simple interest rate of 7%.
The time is (round time in years to nearest tenth):
 
A. 9.2 years
B. 11.1 years
C. 10.7 years
D. 17.1 years
E. None of these
   
Interest of $1,632 with principal of $16,000 for 306 days (ordinary interest) results in a rate of:
 
A. 10%
B. 12%
C. 12 1/2%
D. 13%
E. None of these
   
Given interest of $11,900 at 6% for 50 days (ordinary interest), one can calculate the principal as:
 
A. $1,428,005.70
B. $4,128,005.70
C. $1,428,000.00
D. $1,420.70
E. None of these

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Chapter Tests             01  02  03  04  05  06  07  08  09  10  11  12  13  14  15  16 17 18  19  20  21  22                 Unit Test 01  02  03  04  05  06        
Homework Chapter    01  02  03  04  05  06  07  08  09  10  11  12  13  14  15  16 17 18  19  20  21  22                 Need A Tutor?     Need Homework Help?   
Jim Murphy borrowed $30,000 on a 120-day 14% note. Jim paid $5,000 toward the note on day 95. On day 105
he paid an additional $6,000. Using the U.S. Rule, Jim's adjusted balance after the first payment is:
 
A. $25,000
B. $28,891.67
C. $1,108.33
D. $26,108.33
E. None of these
   
The U.S. Rule:
 
A. Is used only by banks
B. Is never used by banks
C. Allows borrowers to receive interest credit
D. Is hardly used today
E. None of these
   
Janet took out a loan of $50,000 from Bank of America at 8% on March 19, 2015, which is due on July 8, 2015.
Using exact interest, the amount of Janet's interest cost is:
 
A. $5,018.44
B. $2,561.44
C. $5,261.44
D. $5,216.44
E. None of these ($1,216.44)
   
The effective rate of a $30,000 non-interest-bearing simple discount 5%,
60-day note is:
 
A. 5.0%
B. 5.04%
C. 6.0%
D. 5.14%
E. None of these
   
The maturity value of an interest-bearing note is:
 
A. Principal - interest
B. Principal + proceeds
C. Principal + interest
D. Principal - bank discount
E. None of these
   
On March 12, Bill Jones accepted a $12,000 note in granting a time extension of a bill for goods purchased by Ron Prentice.
Terms of the note were 13% for 90 days. On April 24, Bill could no longer wait for the money and discounted the note at
Able Bank at a discount rate of 14%. The proceeds to Bill are:
 
A. $12,047.90
B. $12,163.54
C. $12,390.00
D. $12,048.90
E. None of these
   
Jay discounts a 100-day note for $25,000 at 13%. The effective rate of interest to the nearest hundredth percent is:
A. 13.48%
B. 13.49%
C. 13.02%
D. 13.03%
E. None of these
 
Jill Jones borrowed $18,000 for 180 days from Sovereign Bank. The bank discounts the note at 8%.
The effective interest rate to the nearest hundredth percent is:
 
A. 8.33%
B. 8.32%
C. 8.23%
D. 8.31%
E. None of these
   
Shelley Corporation discounted a $7,000, 90-day note dated June 18, at the Sunshine Bank on July 18 at a discount rate of 12%.
(Assume the $7,000 is the maturity value.)
The amount of bank discount is:
 
A. $70
B. $210
C. $140
D. $240
E. None of these

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Chapter Tests             01  02  03  04  05  06  07  08  09  10  11  12  13  14  15  16 17 18  19  20  21  22                 Unit Test 01  02  03  04  05  06        
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In discounting an interest-bearing note, the discount period represents:
A. Maturity date
B. Date of original note
C. Number of days from date of discount to date of maturity
D. Number of days from date of original note to date of maturity
E. None of these
   
A $15,000, 11%, 120-day note dated Sept. 3, is discounted on Nov. 11. Assuming a bank discount rate of 9%, the proceeds would be:
 
A. $15,550.00
B. $15,351.74
C. $15,531.74
D. $15,135.47
E. None of these
   
Ray Furniture wants to buy a dining room set for $7,000 with a 20% trade discount. Ray needs the cash to pay the bill and is considering discounting a 90-day note dated May 12, with a maturity value of $6,500 at Hunt Bank at a discount rate of 13% on June 5.
The bank discount if Ray discounts the note is:
 
A. $211.25
B. $1,400.00
C. $154.92
D. $212.15
E. None of these
   
Maturity value of a non-interest-bearing note is:
A. Less than face value
B. Sometimes equal to face value
C. Greater than face value
D. Same as the face value
E. None of these
   
Using the table in handbook, the value of $60 deposited in a bank for six years at a rate of 10% compounded annually is:
 
A. $96.63
B. $96.36
C. $106.30
D. $106.03
E. None of these
   
Al Miler, the owner of Al's Garage, estimates that he will need $29,000 for new equipment in 15 years.
Al decides that he will put aside the money now so that in 15 years the $29,000 will be available. His bank offers him 10% 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
   
The effective rate (APY) is:
A. The nominal rate
B. The stated rate
C. The true semiannual rate
D. The true annual rate
E. None of these
   
Lisa Richter deposited $5,000 at 4% compounded semiannually for three years. At the beginning of the fourth year, Lisa
deposited $2,500. What would her balance be at the end of five years assuming she is still earning 4% compounded semiannually?
A. $5,131
B. $8,131
C. $8,800
D. $8,800.99
E. None of these
   
A table factor of .7312 from a present value table of $1 means that a certain rate of interest for a certain period of time will equal:
A. $1
B. Over $1
C. Less than $1
D. Never equal
E. None of these
   
In tables for calculating compound interest, the number of periods is equal to:
A. Number of years divided by rate
B. Number of years × rate
C. Number of years × number of times compounded per year
D. Number of years divided by number of times compounded per year
E. None of these
C. Number of years × number of times compounded per year
   
Gracie Shay wants to buy a new Hummer in five years. Gracie estimates the cost of the Hummer will be $28,000.
If she invests $12,000 now at a rate of 6% compounded semiannually, she:
A. Will have enough money
B. Will have exactly $16,000
C. Will have $18,000
D. Will have $16,126.80
E. None of these
   
Katie Hector wants to purchase a condo in Oxford, MS, in 20 years. The cost of the condo is expected to be $180,000.
Assuming she can earn 6% annually, what should Katie deposit today?
A. $126,900
B. $56,124
C. $89,400
D. $180,000
E. None of these
   
$100,000 for 20 years compounded at 4% annually results in a rate per period of:
A. 3%
B. 5%
C. 4%
D. 1%
E. None of these
   
Compounding:
A. Calculates interest periodically
B. Looks into the present when the future is known
C. Is done only on an annual basis
D. Results in less interest than simple interest
E. None of these

Chapter Tests             01  02  03  04  05  06  07  08  09  10  11  12  13  14  15  16 17 18  19  20  21  22                 Unit Test 01  02  03  04  05  06        

Homework Chapter    01  02  03  04  05  06  07  08  09  10  11  12  13  14  15  16 17 18  19  20  21  22