Chapter 4: Managing a Household Review

Question 1

If you earn $14 an hour, what is the most you should pay for rent each month?

Answer 1

$560

Question 2

If you earned $1,500 a month, how large a mortgage could you get?

Answer 2

$45,000

Question 3

If the electric meter read 9989 on January 4 and 0051 on February 4, how many units did you use in a month?

Answer 3

62

Question 4

A family used 250 units of gas in October. The rate is $0.73 per unit. How much does the family owe the gas company for October?

Answer 4

$182.50

Question 5

The coverage rate for a wood frame house in your area is 0.5%. How much would homeowners insurance cost for a $90,000 wood frame house?

Answer 5

$450

Question 6

Brad pays $346.50 per month for rent. How much does he pay in a year?

Answer 6

$4,158

Question 7

Brad pays $346.50 per month for rent. If Brad earns $1,586 per month, then does he pay rent according to the renter’s rule?

Answer 7

Yes

Question 8

What is the renter’s rule?

Answer 8

You should spend no more than one week’s income for a month’s rent.

Question 9

What is the banker’s rule?

Answer 9

You may borrow up to 2.5 times your annual income to buy a house.

Question 10

Use the banker’s rule to calculate the minimum annual income needed to borrow $75,000.

Answer 10

$30,000

Question 11

A house is purchased for $87,000 with a down payment of $17,000. What is the monthly payment on a 9.5% mortgage? Use the table on page 88.

Answer 11

$589

Question 12

A house is purchased for $87,000 with a down payment of $17,000. How much will be repaid in 30 years with a 9.5% mortgage? Use the table on page 88.

Answer 12

$212,040

Question 13

How much will homeowners insurance cost if the full value of a brick home in Area C is $97,000? (chart page 108)

Answer 13

$315.25

Question 14

Which is more— the amount repaid on a mortgage for $67,900 for 15 years at 9% or the amount repaid on a mortgage for $67,900 for 40 years at 7%? (table page 109)

Answer 14

More will be paid at 7%

Question 15

How many kilowatt hours were used between these meters March 2750 and April 3049?

Answer 15

299 kWh

Question 16

Using these meter readings March 2750 and April 3049; find the monthly bill if each kWh is $0.11.

Answer 16

$32.89

Question 17

Compute the average number of units consumed: 504, 519, 576, 321, 256, 101, 76, 75, 127, 289, 367, and 511

Answer 17

310 units

Question 18

Find the amount to be paid by the mortgage insurance company for a claim on an $89,000 mortgage. The company will pay 37%.

Answer 18

$32,930

Question 19

What is the total amount due for these utility bills: Electric- $156.19, Telephone- $25.16, and Gas- $32.78

Answer 19

$214.13