Unit 3 Test Review Consumer Math

Front

What is a type of deduction that employees can choose to have deducted from their pay?

Back

Voluntary retirement savings.

Front

What does compound interest mean in finance?

Back

Interest grows exponentially based on accumulated interest.

Front

How to calculate FICA deductions from gross pay?

Back

FICA deduction = Gross Pay x FICA Rate (7.65%).

Front

What is the formula to calculate annual income based on hourly wage?

Back

Annual Income = Hourly Wage x Hours per Week x Weeks Worked.

Front

What is discretionary income?

Back

Discretionary income = Net Income - Fixed Expenses.

Front

What is the difference between gross pay and net pay?

Back

Gross pay is the total earnings before deductions; net pay is the amount after deductions.

Front

What is the purpose of Social Security contributions?

Back

To provide financial support for retirees, disabled individuals, and survivors.

Front

What is the significance of state income tax withholdings?

Back

To collect taxes from employees' earnings for state government funding.

Front

How does a bonus affect annual income?

Back

A bonus increases total annual income beyond regular salary.

Front

What is the impact of a 5% annual bonus on total earnings?

Back

It increases total earnings by 5% of the base salary.