1. What is the effective rate of a $30,000 non-interest-bearing simple discount 5%, 60-day note?
2. (1 + markup percent on cost) × cost equals the
A. cost at wholesale.
B. selling price.
C. cost at retail.
3. Burton Bush wants to retire in Arizona when he is 80 years of age. Burton, who is now 55, believes he will need $400,000 to retire comfortably. To date, he has set aside no retirement money. If he gets an interest rate of 6% compounded annually, he will have to invest today. Using the tables in the Business Math Handbook that accompanies the course textbook, determine how much he must invest.
4. When markups are based on the selling price, the selling price is
B. 100% + cost percent.
C. cost – markup.
D. the portion.
5. A local college bookstore paid a net price of $12,500 for textbooks for the coming semester. The publisher offered a trade discount of 20%. The publisher's original list price was
6. An Apple iPod sells for $299, which is marked up 40% of the selling price. What is the cost of the iPod?
7. Differential pay schedule is based on
A. gross pay.
B. different levels of performance.
8. A video game sells at Arnolds for $14.99. Arnold's marks the game up at 40% of the selling price. What is the cost of the game to Arnold?
9. 200 days from March 3 is
A. September 18.
B. September 20.
C. September 19.
D. September 17.
10. A $40,000 loan at 4% dated June 10 is due to be paid on October 11. Calculate the amount of interest (assume ordinary interest).
A. $546.67 Note the exact amount is 539.18
11. A $120,000, 5%, 200-day note dated June 6 is discounted on October 8. The discount period is _______ days.
12. The percentage method aids in calculating
13. A simple discount note results in
A. the same interest costs as a simple interest note.
B. interest that's deducted when note is paid back.
C. lower interest costs than a simple interest note.
D. interest that's deducted in advance.
14. Jane is having difficulty deciding whether to put her savings in the Mystic Bank or in the Four Rivers Bank. Mystic offers a 12% rate compounded quarterly, and Four Rivers offers 14% compounded semiannually. Jane has $40,000 to invest and expects to withdraw the money at the end of five years. Using the tables in the Business Math Handbook that accompanies the course textbook, determine which one of the following is the best deal.
A. Four Rivers for first two years
C. Mystic for last two years
D. Four Rivers
15. What is the single equivalent discount rate of the trade discount 5/4/1?
16. Lee Wong is a sales clerk at Sears. She is paid $8.00 per hour plus a commission of 4% on all sales. Assuming Lee works 39 hours and has sales of $4,000, her gross pay is
17. An invoice dated March 6 with terms of 1/10, EOM results in the end of the discount period on
A. May 31.
B. April 10.
C. April 30.
D. May 30.
18. In calculating the bank discount when discounting an interest-bearing note, which one of the following is not used in the calculation?
A. Bank discount rate
B. Maturity value
C. Principal proceeds
D. Discount period
19. The effective rate of a $25,000 non-interest-bearing simple discount 10%, 90-day note is
(25000 due in 90 days. I'll use 365 days per year. 10% simple discount: 25000*0.10(90/365) = 616.44 Cash in hand at the beginning of the 90 days: 25000 - 616.44 = 24,383.56 Solve for r: 616.44 = 24383.56*r*(90/365) ==> r = 0.10252837 I might also try 360 days. There may be pertinent classroom discussion on this.)
20. FUTA tax is paid
A. by both the employee and the employer.
B. by the employer.
C. only weekly.
D. by an employee.
21. Jasper works at Panera Company for $11.25 per hour plus a commission of 2% of her sales. Assuming Jasper worked 26 hours last week and had sales of $2,610, what is her gross pay?
26 hours of Work @ $11.5 per hour = 26 * 11.25 = 292.5
2% Commission on her sales = (2/100) * 2610 = 52.2
22. Jay discounts a 100-day note for $25,000 at 13%. The effective rate of interest to the nearest hundredth percent is _______ %.