1. If a car is depreciated in four years, what is the rate of depreciation using twice the straight-line rate?
A. 25%
B. 100%
C. 50%
D. 75%
2. With a mortgage of $48,000 for 15 years with a rate of 11%, what are the total finance charges?
A. 545.76
B. $5,023.68
C. $54,576
D. $50,236.80
3. The average daily balance is equal to the sum of daily balances
A. multiplied by number of days in billing cycle.
B. plus number of days in billing cycle.
C. divided by number of days in billing cycle.
D. minus number of days in billing cycle.
4. A $104,000 selling price with $24,000 down at 81/2% for 25 years results in a monthly payment of
A. $546.06.
B. $644.80.
C. $645.60.
D. $654.60.
5. Graduated payments result in the borrower paying
A. the mortgage at 1/2 the standard rate.
B. more at the beginning of the mortgage.
C. less at the end of the mortgage.
D. less at the beginning of the mortgage.
6. The acid test ratio does not include
A. supplies.
B. inventory.
C. accounts receivable.
D. cash.
7. Depreciation expense in the declining-balance method is calculated by the depreciation rate
A. divided by book value at beginning of year.
B. times accumulated depreciation at year end.
C. plus book value at end of year.
D. times book value at beginning of year.
8. At the beginning of each year, Bill Ross invests $1,400 semiannually at 8% for nine years. Using the tables in the Business Math Handbook that accompanies the course textbook, determine the cash value of the annuity due at the end of the ninth year.
A. $37,339.68
B. $37,939.86
C. $37,399.68
D. $38,739.68
9. Using the tables in the Business Math Handbook that accompanies the course textbook, determine the difference between the monthly payments on a $120,000 home at 61/2% and at 8% for 25 years.
A. $91.12
B. $151.02
C. $115.20
D. $81.12
10. Use the following information and the tables in the Business Math Handbook that accompanies the course textbook to answer the question.
$140.10 per month
Cash price: $5,600
Down payment: $0
Cash or trade months with bank-approved credit; amount financed: $5,600
Finance charge: $2,806
Total payments: $8,406
What is the APR by table lookup?
A. 17.00%-17.25%
B. 16.50%-16.75%
C. 17.25%-17.50%
D. 16.75%-17.00%
11. Ted Williams made deposits of $500 at the end of each year for eight years. The rate is 8% compounded annually. Using the tables in the Business Math Handbook that accompanies the course textbook, calculate the value of Ted's annuity at the end of eight years.
A. $4,318.30
B. $2,837.03
C. $2,873.30
D. $5,318.30
12. When are annuity due payments made?
A. Yearly
B. Monthly
C. At the beginning of the period
D. At the end of the period
13. Jen purchased a condo in Naples, Florida, for $699,000. She put 20% down and financed the rest at 5% for 35 years. What are Jen's total finance charges?
A. $600,000.00
B. $457,425.60
C. $606,823.20
D. $626,863.20
14. Federal Express bought material handling equipment for its hub operations that cost $180,000. Using the MACRS, what is the depreciation expense in year 3 (using a five-year class)?
A. $34,560
B. $40,000
C. $15,360
D. $43,560
15. In an ordinary annuity, when does the interest on a yearly investment start building interest?
A. At the end of the first period
B. After the second period ends
C. During the first period
D. At the beginning of the first period
16. Jay Corporation has earned $175,900 after tax. The accountant calculated the return on equity as 12.5%. Jay Corporation's stockholders' equity to the nearest dollar is
A. $14,720.
B. $140,720.
C. $1,407,200.
D. $140,720,000.
17. Dan Miller bought a new Toyota truck for $28,000. Dan made a down payment of $6,000 and paid $390 monthly for 70 months. What is the total finance charge?
A. $5,300
B. $27,300
C. $11,300
D. $13,300
18. What does an amortization schedule show?
A. The increase in loan outstanding
B. The increase to principal
C. The portion of payment broken down to interest and principal
D. The balance of interest outstanding
19. Use the following information to answer the question:
Cost of car: $26,000
Residual value: $6,000
Life: 5 years
Using the given information, determine the depreciation expense for the first year straight-line method?
A. $4,400
B. $4,000
C. $6,000
D. $5,200
20. Dick Hercher bought a home in Homewood, Illinois, for $230,000. He put down 20% and obtained a mortgage for 25 years at 8%. What is the total interest cost of the loan?
A. $184,000.00
B. $242,144.00
C. $327,372.80
D. $242,411.00
21. Abe Aster bought a new split level for $200,000. Abe put down 30%. Assuming a rate of 111/2% on a 30-year mortgage, use the tables in the Business Math Handbook that accompanies the course textbook to determine Abe's monthly payment.
A. $1,367.80
B. $1,423.80
C. $1,982.00
D. $1,387.40
22. A truck costs $16,000 with a residual value of $1,000. It has an estimated useful life of five years. If the truck was bought on July 3, what would be the book value at the end of year 1 using straight-line rate?
A. $12,500
B. $1,500
C. $14,500
D. $16,000
23. Connie made deposits of $2000 at the beginning of each year for four years. The rate she earned is 5% annually. What is the value of Connie's account in four years?
A. $8,260.20
B. $11,051.00
C. $9,051.20
D. $8,260.00
24. Open credit in a revolving charge plan results in
A. as many cash purchases till credit limit is reached.
B. as many charged purchases till credit limit is reached.
C. one purchase per month.
D. the U.S. Rule being applied to each purchase.
25. An annuity due can use the ordinary annuity table if one extra period is added and
A. two payments are added to total value.
B. one payment is subtracted from total value.
C. one payment is added to total value.
D. three payments are subtracted from total value.