2020 Financial Literacy Final Exam

1. What is the hourly wage for Luke who works a 40 hour week and is paid $600?

*Gross pay=Hours worked x Hourly rate

• a. $10.00

• b. $20.00

• c. $30.00

• d. $15.00

2. Frank Alvarado makes a 10% commission on the first $5,000 sales and 15% on any sales over $5,000. Find his total graduated commission on $25,000 in sales. *commission = sales x commission rate

• a. $2500

• b. $3500

• c. $3750

• d. $6250

3. Mark is trying to find his annual salary for when he retires at the end of the year. Mark is paid 2.5% of his average 5 year salary times the number of years worked. If Mark works 35 years and his last 5 year salaries are $70,000, $75,000, $80,000, $85,000, and $90,000. What is the annual pension for Mark?

*annual pension =( Sum of salaries/5)x .025 x 35

• a. $70,000

• b. $80,000

• c. $79,000

• d. None of the above

4. Isabelle’s weekly salary is $1000. The social security tax rate is 6.2% and the Medicare is 1.45%. Find the total taxes paid for social security and Medicare.

* Social Security=Gross Pay x Social Security rate

*Medicare = Gross Pay x Medicare rate

• a. $62.00

• b. $76.50

• c. $14.50

• d. $7.70

5. Jalen Allen wants to rent a house. The landlord wants the first and last month’s rent plus a security deposit that is one and a half times the rent, plus a $50 application fee. If Jalen pays $2,850, what is the security deposit?

*Let r = rent

*security deposit = 1.5 rent:

*Formula: 1r + 1r + 1.5r + $50 = $2850

*3.5r +$50 = $2850

• a. $800.00

• b. $814.29

• c. $1200.00

• d. $1242.86

6.The Lopez Family has the following monthly expenses: $1500 Housing, $750 Vehicle, $750 Church, $500 Food, $500 Savings, $250 Other, $250 Entertainment, $500 Credit Cards. What Percentage is spent on Housing?

*Percentage = category/total of all categories

• a. 5%

• b. 10%

• c. 20%

• d. 30%

7. Justin Paden has a monthly net income of $5,500. His variable expenses are $2,000 and his fixed expenses are $1,000. His annual expenses are $24,000. What is his cash flow for January?

*Cash Flow = Net Income – (Variable + Fixed + (Annual Expense/12))

• a. $1000 more than his expenses

• b. $1000 less than his expenses

• c. $500 more than his expenses

• d. $500 less than his expenses

1. Adan is buying a new set of furniture for his house that costs 5,000 at 10% interest for 18 months. What is the total simple interest paid?

* I=p*r*t

* remember t = months/12

• a. $800

• b. $500

• c. $750

• d. $650

9. Find the amount in the account after 10 years for 50,000 investment at 3% interest compounded monthly.

A = P(1.00 + r/n)^nt

*Where P=Principal, R= rate as a decimal, n= compounds in a year, t=time in years

• a. $71,288.04

• b. $51,520.80

• c. $67,467.68

• d. $None of the above

10. Jesus Jaquez deposits $300 in an ordinary annuity at the end of each month in an account earning 5% interest compounded monthly. If he starts when he is 20 years old and stops when he is 60 years old. What is the future value of the annuity?

*AD= amount deposited

* r=rate as a decimal

*n=number of compounds in a year

*t= time in years : t= 40 years

FV = AD((1.00 +r/n)^nt -1)/(r/n)

• a. FV = $10,775.14

• b. FV = $75,683.66

• c. FV = $457,806.05

• d. FV= $529,806.05