Fall 2024 - AFA Final Exam Review

Front

What is the tax owed for a married couple filing jointly with a taxable income of $60,149?

Back

$6,827

Front

How do you calculate the monthly payment for a car loan?

Back

Use the formula: M = P[r(1+r)^n] / [(1+r)^n – 1], where M is the total monthly payment, P is the principal loan amount, r is the monthly interest rate, and n is the number of payments.

Front

What is the net price for attending college after scholarships and grants?

Back

Net Price = Total Tuition - (Scholarships + Grants). For Joseph: $26,750 - ($650*2 + $5,000 + $6,250) = $14,200.

Front

What is the Social Security tax due on a gross income of $24,388?

Back

Social Security Tax = Gross Income * 6.2%. For $24,388, it is $1,512.06.

Front

What is the formula to calculate the total tax owed based on taxable income?

Back

The total tax owed can be calculated using the tax brackets and rates applicable to the taxable income.

Front

What percentage of a car's purchase price is typically required as a down payment?

Back

A common down payment percentage is 20%.

Front

What is the interest rate for a car loan if it is stated as 4.8% annually?

Back

The monthly interest rate is 4.8% / 12 months = 0.4%.

Front

How do you determine the total cost of a car after financing?

Back

Total Cost = Down Payment + (Monthly Payment * Number of Payments).

Front

What is the significance of the FAFSA in college funding?

Back

FAFSA determines eligibility for federal student aid, including grants, loans, and work-study.

Front

What is the difference between gross income and taxable income?

Back

Gross income is the total income before deductions, while taxable income is the income after deductions and exemptions.