Finance Midterm EXAM

Front

What is net pay?

Back

Net pay is the amount of money an employee takes home after all deductions (taxes, insurance, etc.) have been subtracted from their gross pay.

Front

How do you calculate Social Security tax?

Back

Social Security tax is calculated as a percentage (6.2%) of the gross pay.

Front

What is the formula to calculate simple interest?

Back

Simple Interest = Principal x Rate x Time. For example, if you deposit $350 at an interest rate of 4% for 3 months, the interest earned is $350 x 0.04 x (3/12) = $3.50.

Front

How do you find the percentage decrease in price?

Back

Percentage Decrease = ((Old Price - New Price) / Old Price) x 100. For example, if a ticket price decreases from $8.00 to $5.00, the decrease is (($8.00 - $5.00) / $8.00) x 100 = 37.5%.

Front

What does it mean to claim allowances on a tax form?

Back

Claiming allowances on a tax form reduces the amount of income tax withheld from your paycheck. More allowances mean less tax withheld.

Front

How do you calculate the percentage of points earned on a test?

Back

Percentage Earned = (Points Earned / Total Points) x 100. For example, if Jeremy missed 19 points out of 100, he earned 81%.

Front

What is the relationship between percentages and fractions?

Back

Percentages are a way to express a fraction out of 100. For example, 20% is equivalent to 20/100 or 1/5.

Front

How do you calculate state tax from gross pay?

Back

State tax is calculated as a percentage of gross pay. For example, if the state tax rate is 1.5% and the gross pay is $800, the state tax would be $800 x 0.015 = $12.

Front

What is the definition of gross pay?

Back

Gross pay is the total amount of money earned by an employee before any deductions are made.

Front

How do you calculate total deductions from gross pay?

Back

Total deductions are calculated by adding all individual deductions (taxes, insurance, etc.) together and subtracting from gross pay.