Math Flashcards
(22 cards)
Assume you are in a 35% marginal tax bracket.
If you saved $2,000 in your flexible savings account, you will save ___ in taxes.
a) $700
b) $1,300
c) $2,000
d) $3,077
a) $700
What is the future value of $2,500 invested today at 12% interest in 5 years with interest compounded quarterly?
a) $4,405.85
b) $4,031.50
c) $4,515.28
d) $1,384.19
e) $4,552.15
c) $4,515.28
Assume that you save 5% of your monthly pay in your 401-K and your employer matches 4%.
Before even investing the money, you have already realized a ______ return on your savings.
a) 80%
b) 40%
c) 60%
d) 10%
a) 80%
What is the present value of $11,800 received 20 years from now using a 13% interest or discount rate, with interest compounded daily?
a) $879.28
b) $913.43
c) $158,798.58
d) $876.83
e) $775.96
d) $876.83
What is the present value of $41.00 (forty one dollars) deposited at the beginning of each week for 8 years earning 8.5% interest?
a) $24,439.55
b) $12,368.15
c) $11,335.36
d) $12,388.37
e) $326.13
d) $12,388.37
Assume that you are a saver, and use coupons. Each week you save $5.00 using coupons, and save the money for your retirement. What is the future value of $5.00 (five dollars) deposited at the beginning of each week for 45 years earning 10% interest?
a) $3,594.52
b) $230,878.47
c) $298,538.23
d) $7,052.15
e) $230,435.33
b) $230,878.47
What is the monthly car payment on a 5 year $30,000 car loan at 9% annual interest?
a) $7,701.55
b) $7,712.77
c) $618.11
d) $7,075.94
e) $622.75
e) $622.75
If you have $10,000 today, and save $12,000 per quarter year at the end of the quarter while earning an annual interest rate of 5%, how many quarters would it take to accumulate $100,000?
a) 4
b) 9
c) 11
d) 7
e) 12
d) 7
Assume the following information for a home mortgage:
Original loan amount = $155,000 Annual interest rate = 6.75% Term of loan = 30 years
How much principal and interest was paid in year two, and what is the principal balance on the loan after two years?
a) $1,757.00 of principal; $10,306.88 of interest; balance due $151,732.99
b) $1,701.99 of principal; $10,294.45 of interest; balance due $151,578.97
c) $1,766.97 of principal; $10,296.99 of interest; balance due $151,581.09
d) $1,776.87 of principal; $10,287.06 of interest; balance due $151,428.48
e) $1,757.00 of principal; $10,239.40 of interest; balance due $150,733.38
c) $1,766.97 of principal; $10,296.99 of interest; balance due $151,581.09
What is the Net Present Value (NPV) and internal rate of return (IRR) of spending $10,000 today on graduate school when you earn $40,000/year today and will earn $42,000/year for the next 35 years after grad school. Assuming you could invest this money elsewhere and earn 10%?
a) NPV = ($9,288.32); IRR = (20.0%)
b) NPV = $9,288.32; IRR = 20.0%
c) NPV = $50,498.99; IRR = 98.7%
d) NPV = $395,054.68; IRR = 420%
e) NPV = ($19,288.32); IRR = 41.6%
b) NPV = $9,288.32; IRR = 20.0%
Assume you receive a taxable benefit worth $1,000/year. What is the after tax equivalent of this benefit for individuals in a 24% marginal tax bracket?
a) $1,500
b) $760
c) $1,000
d) $1,316
b) $760
What is the effective interest rate assuming the following:
Annual rate = 12.0%
Pmt/yr = 4
a) 12.55%
b) 12.68%
c) 12.75%
d) 12.73%
a) 12.55%
What would be your annual return (interest compounded annually) if you paid $2,500 for a stock that paid a $125 annual dividend, and sold the stock five years later for $4,500?
a) 16.5%
b) 17.5%
c) 17.0%
d) 15.0%
e) 15.5%
a) 16.5%
A $1,000 par value bond trades for $950. The bond has a coupon of 6%, and pays interest every six months.
What is the current yield on this bond?
a) 3%
b) 3.2%
c) 6%
d) 6.3%
d) 6.3%
Assume the following:
Gross salary = $120,000
Employee contributions to 401-K = $12,000
Employer match to 401-K = $5,000
Flexible spending account savings = $2,000
Health insurance premiums paid by employee = $3,000
Health insurance paid directly by employer = $8,000
What is the W-2 taxable income?
a) $103,000
b) $98,000
c) $95,000
d) $90,000
e) $120,000
a) $103,000
Assume you receive a tax free benefit worth $1,000/year. What is the pretax equivalent of this benefit for individuals in a 12% marginal tax bracket?
a) $1,176
b) $1,000
c) $1,136
d) $850
c) $1,136
A UCF student has earned (W-2) income of $3,000 and another $7,000 of investment income (interest, dividends and capital gains).
In this situation, the student could open up a traditional IRA or Roth IRA and make a contribution of _________ in 2020.
a) $3,000
b) $6,000
c) $10,000
a) $3,000
Assume the following:
Shares outstanding = 10 million
Stock price = $20
Book value of equity = 100 million
Value of debt = 40 million
Value of preferred stock = 10 million
Value of minority interest = 5 million
Cash on hand = 55 million
What is the enterprise value?
a) 100 million
b) 190 million
c) 200 million
d) 310 million
c) 200 million
A stock pays a quarterly dividend of $1.00/share. The stock trades at $100 per share, and has a book value of $50 per share.
What is the annual dividend yield?
a) 1%
b) 4%
c) 0.5%
d) 2%
b) 4%
Assume you are seeking a mortgage, and a bank uses a back-end total debt ratio of 35%. Your monthly car and student loan payments total $500/month. Your income is $5,000/month. How large of a house payment can you afford (PITI)?
a) $1,750
b) $1,250
c) $1,000
d) $500
b) $1,250
Assume you pay $3,000 in closing costs to refinance your mortgage at a new rate of 4%. You will save $100 per month for the next 30 years. How long must the homeowner stay in the house using TVM breakeven?
a) 30 months
b) 31.66 months
c) 33 months
d) 35.78 months
b) 31.66 months
Assume that a house is sold for $300,000. The square footage is as follows:
Area under air conditioning and heating2,800Garage400Patio200Total3,400
The cost per square foot as traditionally calculated in the real estate industry is:
a) $88.24
b) $93.75
c) $107.14
d) $0.0093
c) $107.14
