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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
C. Rate varies with employment record
   
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
   
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
   
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
B. Rarely changes
   
Ron Swift earned $1,500 last week. He is married, is paid biweekly, and claims two exemptions.
Using the percentage method (use tables in the handbook), his income tax is:
 
A. $109.69
B. $116.40
C. $93.76
D. $140.88
E. None of these
   
The percentage method aids in calculating:
 
A. SUTA
B. FUTA
C. FICA
D. FIT
E. None 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
   
David is paid on a graduated commission scale at Nooter Company. He receives 2% commission on the first $20,000,
6% on sales from $20,000 to $70,000, 8.5% commission on sales from $70,000 to $100,000, and 10%
commission on sales over $100,000. David had sales of $82,000. His commission is:
 
A. $8,200
B. $6,200
C. $4,240
D. $4,420
E. None of these

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Jill Hartman earns $750 per week plus 3% of sales in excess of $6,500.
If Jill sells $25,000 in the first week, her earnings are:
 
A. $945
B. $1,305
C. $1,500
D. $1,503
E. None of these
   
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
   
Lana Powell has cumulative earnings of $116,000 at the end of September. In the first week in October she earns
$2,000. The amount deducted for Social Security and Medicare from her check is (assume Social Security rate of
6.2% on $118,500 and Medicare of 1.45%):
 
A. $29.00
B. $153.00
C. $53.20
D. $92.00
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)
   
The Labor Fair Standards Act:
 
A. Sets minimum wage standards
B. Sets overtime regulations
C. Is a federal act
D. May exempt certain workers
E. All of these
   
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. $312
B. $321
C. $472
D. $427
E. None of these
   
If you are paid twice a month, you are being paid:
 
A. Weekly
B. Biweekly
C. Semimonthly
D. Monthly
E. None of these
   
A note dated August 18 and due on March 9 runs for exactly:
 
A. 230 days
B. 227 days
C. 272 days
D. 203 days
E. None of these
   
The number of days between May 20 and November 22 is:
 
A. 197
B. 206
C. 186
D. 183
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
   
Janet Home went to Citizen Bank. She borrowed $7,000 at a rate of 8%. The date of the loan was September 20.
Janet hoped to repay the loan on January 20. Assuming the loan is based on ordinary interest, Janet will
pay back how much interest on January 20?
 
A. $188.22
B. $187.18
C. $189.78
D. $187.17
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
   
Interest is equal to:
 
A. Principal × rate divided by time
B. Principal divided by rate × time
C. Principal × time
D. Principal × rate × time
E. None of these
   
Matty Kaminsky owns a new Volvo. His June monthly interest is $400. The rate is 8 ½%. Matty's principal
balance at the beginning of June is (use 360 days):
 
A. $65,740.58
B. $64,470.58
C. $65,704.58
D. $56,470.59
E. None of these
   
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
   
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
   
A $40,000 loan at 4% dated June 10 is due to be paid on October 11. The amount of interest is (assume ordinary interest):
 
A. $503.00
B. $2,500.00
C. $546.67
D. $105.33
E. None of these
   
Joyce took out a loan for $21,900 at 12% on March 18, 2015, which will be due on January 9, 2016.
Using ordinary interest, Joyce will pay back on Jan. 9 a total amount of:
 
A. $2,167.10
B. $24,068.10
C. $24,038.40
D. $2,138.40
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
   
Christina Hercher borrowed $50,000 on a 90-day 8% note. Christina paid $3,000 toward the note on day 40.
On day 60 she paid an additional $4,000. Using the U.S. Rule, Christina's adjusted balance after the first payment is:
 
A. $1,008.89
B. $48,008.89
C. $47,444.44
D. $44,744.44
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
   
Federal Reserve banks as well as the federal government like to
calculate simple interest based on:
 
A. Exact interest, ordinary interest
B. Using 30 days in each month
C. Using 31 days in each month
D. Exact interest
E. None of these
   
On April 12, Dr. Rowan accepted a $10,000, 60-day, 11% note from Bill Moss granting a time
extension on a past-due account. Dr. Rowan discounted the note at the bank at 12% on May 13.
The bank discount is:
 
A. $98.44
B. $111.94
C. $94.48
D. $111.49
E. None of these
 

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The maturity value of a $20,000, 7%, 75-day interest-bearing note dated
September 10, is:
 
A. $22,912.67
B. $20,291.67
C. $21,029.67
D. $22,219.76
E. None of these
   
A $25,000, 15%, 80-day note dated November 5, is discounted at National
Bank on January 5. The discount period is:
 
A. 80 days
B. 19 days
C. 61 days
D. 91 days
E.None of these
   
Jill Corporation accepted a $16,000 note on Aug. 12. Terms of the note were 13% for 100 days.
Jill discounted the note on September 28, at the Reno Bank at 14%. The proceeds to Jill would be:
 
A. $341.69
B. $16,236.09
C. $303.00
D. $16,277.78
E. None of these
   
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. Maturity value
C. Bank discount rate
D. Discount period
E. None of these
   
Tiffany purchased a $10,000, 13-week Treasury bill that is paying 2.25%.
What is the effective rate on this T-bill?
 
A. 2.2%
B. 2.7%
C. 2.26%
D. 2.0%
E. None of these
   
Justin discounts a 115-day note for $26,000 at 8.5%. The effective rate of interest to the nearest tenth percent is:
 
A. .8%
B. .87%
C. 8.5%
D. 8.7%
E. None of these
   
The bank discounts an $8,750 non-interest-bearing simple discount note at 6% for 60 days. What is the discounted amount?
 
A. $8.75
B. $78.50
C. $86.30
D. $87.50
E. None of these
D. $87.50
   
An 8% 13-week Treasury bill would have an effective interest rate of (to
the nearest hundredth percent)? Assume it is a $10,000 Treasury bill.
 
A. 8.20%
B. 8.16%
C. 8.17%
D. 9.00%
E. None of these
   
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 bank discount of an $18,000 non-interest-bearing, simple discount 8%, 90-day note is:
 
A. $18,360
B. $17,640
C. $630
D. $360
E. None of these
   
If one discounts a non-interest-bearing note, all the following will be used except:
 
A. Principal + interest
B. Discount rate
C. Discount period
D. Face value of the note
E. None of these
   
J. Ryan discounts an 80-day note for $15,000 at 12%. The bank discount is (assume ordinary interest):
 
A. $14,600
B. $15,400
C. $400
D. $15,000
E. None of these
   
The maker of a promissory note:
 
A. Issues the note
B. Never borrows the money
C. Extends the credit
D. Issues the note and extends credit
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
   
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
   
Using the table in your handbook, $6,000 for six years at 8½% compounded daily will grow to:
 
A. $8,991.02
B. $8,950.10
C. $9,991.20
D. $9,990.02
E. None of these
   
Sam Monte deposits $21,500 into Legal Bank, which pays 6% interest that is compounded semiannually.
Using the table in the handbook, what will
Sam have in his account at the end of six years?
 
A. $29,760.30
B. $30,654.70
C. $30,456.07
D. $29,670.03
E. None of these
   
Present value does not:
 
A. Know future amount
B. Know the present dollar amount
C. Find present dollar amount
D. Use tables
E. None of these
   
Earl Miller deposited $25,000 at Y Bank at an interest rate of 12% compounded quarterly.
(Use the tables in the handbook.) The effective rate (APY) is:
 
A. 12%
B. 12.55%
C. 12.15%
D. 13.2%
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
   
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
   
$20,000 for 14 years compounded at 8% semiannually results in how many periods?
 
A. 64
B. 28
C. 12
D. 14
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
   
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
   
Jim Moore opens a new savings account. He deposits $12,000 at 12% compounded semiannually.
At the start of the fourth year, Jim deposits an additional $50,000 that is also compounded semiannually
at 12%. At the end of six years, the balance in Jim Moore's account is (use the tables in the handbook):
 
A. $66,081.20
B. $50,000.00
C. $16,081.20
D. $88,555.42
E. None of these ($95,070.71)
   
$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
   
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
   
The interest on $6,000 at 6% compounded semiannually for eight years is (use table in the handbook):
 
A. $3,628.20
B. $3,682.02
C. $362.82
D. $13,628.20
E. None of these

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