Financial Math - Fall Semester Exam - 2024 (Review)

Front

Which organization ensures bank deposits in the U.S. up to a certain amount?

Back

Federal Deposit Insurance Corporation (FDIC) - A U.S. government agency that protects depositors by insuring deposits in member banks.

Front

Income earned by workers who are self-employed is called _____

Back

Profit - The income that remains after all expenses are deducted from revenue.

Front

Marisol receives total employee benefits that are 14.5% of her gross annual pay. If Marisol has a gross annual pay of $50,000, how much in total employee benefits does she receive?

Back

$7,250 - Calculated as 14.5% of $50,000.

Front

Capital gains occur when an asset is sold for more than its purchase price. True or False?

Back

True - Capital gains are the profits from the sale of an asset.

Front

Wendy purchased an empty lot in her neighborhood for $45,000. Two years later, she sold the lot for $47,000. What is Wendy’s capital gain on this investment?

Back

$2,000 - Capital gain is calculated as selling price minus purchase price.

Front

What is the formula to calculate profit?

Back

Profit = Revenue - Expenses.

Front

Define 'capital gains tax'.

Back

A tax on the profit made from selling an asset, such as stocks or real estate.

Front

What does the term 'gross pay' refer to?

Back

The total amount of money earned by an employee before any deductions.

Front

What is the difference between 'fixed' and 'variable' expenses?

Back

Fixed expenses remain constant regardless of activity level, while variable expenses fluctuate based on usage or production.

Front

What is the purpose of a budget?

Back

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