Financial Math final

Front

What is the purpose of tax money?

Back

Tax money is used to fund public services such as Social Security, the military, national parks, and education (excluding private school education).

Front

What percentage of your take-home pay should rent ideally not exceed?

Back

According to a rule of thumb, rent shouldn't take up more than 25-30% of your take-home pay.

Front

What are the common methods to file taxes?

Back

You can file taxes through a tax professional, mailing in a paper tax return, or using tax software like TurboTax. You cannot file through your employer's HR department.

Front

How do you calculate the unit price of an item?

Back

The unit price is calculated by dividing the total cost by the number of units (e.g., $14.99 for 6 cans of soup gives a unit price of about $2.50).

Front

What is the formula to find the unit price of a product?

Back

Unit price = Total cost / Number of units.

Front

What is the definition of a budget?

Back

A budget is a financial plan that outlines expected income and expenses over a specific period.

Front

What is the difference between fixed and variable expenses?

Back

Fixed expenses remain constant each month (e.g., rent), while variable expenses can fluctuate (e.g., groceries).

Front

What is the importance of saving for emergencies?

Back

Saving for emergencies provides financial security and helps cover unexpected expenses without going into debt.

Front

What is compound interest?

Back

Compound interest is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods.

Front

How does inflation affect purchasing power?

Back

Inflation decreases purchasing power, meaning that over time, the same amount of money buys fewer goods and services.