Name: Date: Period: MATH MODELS (DEC 2017) 1 st Semester Exam Review

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1 Name: Date: Period: MATH MODELS (DEC 2017) 1 st Semester Exam Review Unit 1 Vocabulary: Match the following definitions to the words below. 1) Money charged on transactions that goes to fund state and federal governments. 2) Depositing money, withdrawing money, and other financial services at a bank. 3) A fixed price paid for goods or services. 4) Money charged by an electronic banking outlet; significant variation in charges. 5) A deficit in a bank account caused by drawing more money than the account holds. 6) The management of money; borrowing money for a purchase. 7) Money earned or awarded. 8) An account held at a financial institution that allows checks or cash to be withdrawn from available funds. 9) A small plastic card that allows holders to make purchases on credit (money that doesn t have to be paid back until later). 10) A function whose graph is a straight line and has a constant rate of change. 11) An online system that allows for all the same financial transactions as a bank. 12) A small plastic card that allows the holders to make purchases from their checking account from available funds. 13) A fee charged to process a loan or another other services that needs processing. 14) The act of deducting or subtracting from earned income. 15) An estimate of income and expenditure for a set period of time. Linear Functions Rates Finance Budget Compensations Deductions Taxes Banking Online Banking Checking Account Credit Card Overdraft Processing Fees Debit Cards ATM Fees Answer each question based on the information given. 16) Adam got a new job making $8.55 an hour. What equation would he use to determine his gross pay in a given week?

2 17) Bonnie got a job working as a technician that earns $10.50 an hour plus time and half for every hour worked over 40 hours in a week. A) Write an equation for a normal work week with no overtime. B) Write an equation for if Bonnie works over 40 hours. Budgeting 18) You just got a job that pays $465 per week and you plan to move out on your own. You need to make a monthly budget. You have the following expenses; Record them in the table on the right: You rent an apartment for $800 per month You have a used car with a payment of $180 per month Groceries cost you $45 per week The water bill is about $40 per month on average Electricity costs $105 per month on average You put aside $175 for entertainment and other expenses Expense Name Amount ($) 19) What is your Net Income (Income Expenses)? Expense Total 20) Do you have enough income to cover your expenses (a surplus or disposable income) or are you spending too much money (a deficit)? 21) Write an expense that you think is important/necessary and should be added to the above list. 22) State an expense that you could reasonably reduce or eliminate to reduce your total expenses or deficit. On the next questions, write debit, credit or both given the situation. 23) Diego doesn t carry cash, so he pays for lunch using his card which decreases his checking account. 24) Brandi went to lunch and paid with a card that she received the bill for a month later. 25) Chelsea lost her card so she reported it stolen immediately. 26) Jack was charged a hefty fee because he over-drafted. 27) Andres used a PIN to make a purchase at a grocery store. 28) Allyssa loves her card because it is convenient to use.

3 You are starting a position that pays $9.15 an hour. Answer the questions below and then fill in the chart to determine your net biweekly pay. 29) What is your gross biweekly pay if you work 8 hours a day and 5 days a week? 30) Social Security withholding is 6.2% of your gross pay. How much is being withheld biweekly? 31) Medicare withholding is 1.45% of your gross pay. How much is being withheld biweekly? 32) Use the chart below to determine your tax withholding if you do not have any allowances. TABLE 2 BIWEEKLY Payroll Period (a) SINGLE person (including head of household) (b) MARRIED person If the amount of wages If the amount of wages (after subtracting The amount of income (after subtracting The amount of income withholding allowances) tax to withhold is: withholding allowances) is: tax to withhold is: is: Not over $ $0 Not over $ $0 Over But not over of excess over Over But not over of excess over $87 $443.. $0.00 plus 10% $87 $329 $1,042.. $0.00 plus 10% $329 $443 $1,535.. $35.60 plus 15% $443 $1,042 $3,225.. $71.30 plus 15% $1,042 $1,535 $3,592.. $ plus 25% $1,535 $3,225 $6,171.. $ plus 25% $3,225 $3,592 $7,400.. $ plus 28% $3,592 $6,171 $9,231.. $1, plus 28% $6,171 $7,400 $15,985.. $1, plus 33% $7,400 $9,231 $16,227.. $1, plus 33% $9,231 $15,985 $16,050.. $4, plus 35% $15,985 $16,227 $18,288.. $4, plus 35% $16,227 $16, $4, plus 39.6% $16,050 $18, $5, plus 39.6% $18,288 33) What is your net pay? 34) Fill out the chart below using the information that you are depositing $200 into a savings account that earns 2% interest compounded yearly. Compound Interest Year Amount Interest Paid 1 $200 2% 2 2% 3 2% 4 2% Total Amount in Account 35) Find the interest on a loan of $1300 that is borrowed at 6% interest compounded quarterly for 5 years. 36) Your 3 year investment of $5,800 earns 2.3% and is compounded monthly. What will your total return be?

4 Unit 2 Vocabulary: Match the following definitions to the words below. 37) The ratio of the monthly housing expense to the monthly gross income used to determine if the lender is qualified for a mortgage; usually cannot be more than 28% to qualify. 38) The true rate of interest charged for the loan over a full year. 39) A loan that you repay the amount borrowed plus interest in equal payments over a certain amount of time. Financing an appliance is a good example of this. 40) A table that displays the payment number, payment on the interest, payment on the principal, and the balance of the loan. 41) An agreement in which you make equal monthly payments for a specified period of time, which usually does not result in ownership. 42) A long-term loan, usually associated with the purchasing of a home. Loan can last up to 30 years. 43) The original investment or loan amount. 44) The interest paid on most investments and savings accounts in most banks, where the interest earned in each period is added to the balance. 45) The true rate of interest earned on an investment over a full year. 46) A home loan where the interest rate remains the same through the term of the loan. 47) A home loan in which the interest rate is periodically adjusted based on current market rates. 48) A loan that can be paid off using variable monthly payments over an unspecified period of time. Credit cards are a good example of this. PRINCIPAL COMPOUND INTEREST AMORTIZATION SCHEDULE LEASING MORTGAGE FIXED RATE MORTGAGE (FRM) EFFECTIVE ANNUAL YIELD / ANNUAL PERCENTAGE YIELD (APY) ADJUSTABLE RATE MORTGAGE (ARM) HOUSING EXPENSE RATIO ANNUAL PERCENTAGE RATE (APR) FIXED / CLOSED-END INSTALLMENT LOAN OPEN-END INSTALLMENT LOAN 49) You agree to a mortgage of thirty years for a house with a present value of $189, and the lender charges an interest fee of 5.75%. What is the total cost of the Mortgage? N= I % = PV = PMT = FV = P/Y = C/Y = PMT = END OR BEGIN The total cost of the mortgage is. 50) If the mortgage in problem #1 was for 15 years instead of 30, what would the total cost be?

5 51) If you paid a 20% down payment on the mortgage in problem #1, what would the new total cost be? 52) You have a weekly income of $950. The bank will only lend to you at a 30% housing expense ratio (which is based on monthly income). What is the maximum payment you can afford? 53) For your retirement, you want to save up $550, You intend to use a savings account with an APY of 2.4%, compounded quarterly, and leave the money in for 38 years. How much do you need to invest to reach your goal? N= I % = PV = PMT = FV = P/Y = C/Y = PMT = END OR BEGIN I need to invest. 54) You decide to purchase a new vehicle for $53,333. The finance company offers you a 9 year loan with an interest rate of 1.6% compounded monthly. What is the total cost to you of the vehicle? N= I % = PV = PMT = FV = P/Y = C/Y = PMT = END OR BEGIN The total cost of the vehicle is. 55) If the finance company from problem #37 offered you a discounted interest rate of 1.2% compounded monthly if you made a 15% down payment, what would be the total cost to you? 56) Your $53,333 vehicle depreciates at a rate of 5.8% annually. What will the value of the car be in two years? N= I % = PV = PMT = FV = P/Y = C/Y = PMT = END OR BEGIN The vehicle will be worth. 57) You talk to a leasing company, and they offer you a 2 year lease on the $53,333 vehicle with a 3.3% interest rate compounded monthly. The leasing company assumes a 5.8% depreciation each year. What would be the total cost of the lease to you?

6 58) If the leasing company from problem #40 offered you a discounted interest rate of 2% interest rate compounded monthly if you made a $3000 down payment, what would be the total cost of the lease to you after 2 years? Use the following Amortization schedule to answer questions ) What is the monthly payment? 60) How much interest occurred during the third month of the loan? 61) What was the loan reduction on the fifth month? 62) What is the balance after a year of paying on the loan? 63) What is the balance after the first payment on the loan? 64) What will be the balance at the start of the thirteenth month? Today you decide to plan for your retirement. You have a monthly income of $4,750 and will put aside 8% of your income every month into your 401k. Your company will match up to 4%, which means they put that amount into your 401k at the same time as you do. 65) How much money is deposited into the 401k every month?

7 You hope to be at the company for your entire career. You are currently 24, and intend to retire at 65. The above mentioned 401k will earn at a 9.00% APY compounded monthly. 66) According to your plans, what will the 401k be worth when you retire? Upon retirement, the annuity starts making payments to you until it is entirely liquidated (runs out of money). The annuity continues to earn interest at 9.00%. You figure you can live off of $46,000 a year. 67) How many years the annuity can sustain paying you the above amount per year. (It s ok if it is a decimal) 68) You are buying a house for $289,000. Make an amortization schedule for the first 3 months of the loan if the monthly mortgage payment is $1,391 and the APR is 4.8%. Month Amount of Loan Payment Interest Loan Reduction New Balance ) Compare and contrast buying a house versus renting. Justify your reasoning.

8 70) Compare and contrast buying a new car versus buying a used car versus leasing a car. Use the stock shown below to answer the questions. 71) What is the name of the stock? 72) What is the ticker symbol? 73) What is the price for the stock? 74) How many shares are there of the stock? 75) If the amount of shares aren t given, how do you find the amount of shares there are? (What formula?) 76) On what exchange is this stock traded? 77) Does this company offer a dividend? 78) Do you think you will ever invest in the stock market? Why or why not?