Personal Finance Review

Bob is working for a bank. He earns $8.00 an hour, works 40 hours a week, and gets paid every 2 weeks. Every pay period he pays $63.08 into federal withholdings tax, $33.21 into state withholdings tax, and $42.05 into FICA (Social Security Tax). What is Bob’s net pay on his paycheck?

• $501.66

• $363.32

• $576.92

• $640.00

In relation to other options, how liquid is a savings account?

• More liquid than cash

• Less liquid than mutual funds

• More liquid than a certificate of deposit

• More liquid than a checking account

When a goal has been set to save $100.00 a month for an emergency fund of $2,000.00, giving up food from the vending machine to achieve that goal is the:

• opportunity cost.
• interest.
• specific part of the SMART goal.
• trade-off.

One’s lifestyle is to their standard of living as present is to:

• past.
• recent.
• future.
• gift.

Andy is developing an Income and Expense Statement. He has gathered all his receipts, bank statements, paycheck stubs, and spending records. He needs to categorize them into income and expenses. He is unsure which items should be recorded as expenses. Which should be recorded as expenses?

• Taxes deducted from his paycheck, money saved from his paycheck for emergencies, and his car insurance
• Money saved from his paycheck for emergencies, interest paid on his car loan, and his tax refund from filing last year’s tax return
• The scholarship he receives for studying Chinese at the local community college, his car insurance payment, and stock dividends he received from his grandmother
• Clothing he purchased for a job interview, tuition for a class he is taking at the local community college, and interest from his savings account

Mark and Susan, a recently married couple with full‐time jobs, set a goal of putting $200 in savings every month to make a down payment on a home in five years. What type of goal have they set?

• Short‐term
• Intermediate
• Long‐term
• Unrealistic

Michael wants to develop a spending plan for himself to use during his final year of high school. What will he need to do as his first step?

• Decide what income and spending categories would reflect his values, needs, and wants.
• Decide how much money he can spend for each of the bills he pays each month.
• Track his current income and expenses—if he has already created an Income and Expense Statement then he has completed this step.
• Develop a control system that will work with his life style.

Kaylee will save her allowance of $25 per month to purchase a $150 MP3 player in six months. This is an example of what type of goal?

• Short‐term goal
• Long‐term goal
• Mid‐term goal
• This is not an example of a goal.

When Charles received his college placement test results, he is informed that he will need remediation in math. Which situation is not true of Charles’ situation?

• Charles will need to take at least one course because he is not college-ready.
• Since the remedial courses Charles must take will not count toward his degree, he needs to take the courses but tuition is not charged.
• Charles should have taken a placement test earlier in high school so he could strengthen his academic skills before heading for college.
• Remediation courses do not count toward his degree program so he may need to take extra credits and his college degree may take longer to complete.

Perry would like to purchase a new car. What should he consider first in the planned buying process?

• Research different sellers to determine where to purchase the car from
• Evaluate the opportunity cost and trade-offs to purchasing the car
• Rank product features in order of importance
• Calculate the cost of ownership