Consumer Math Working With Numbers In Real Life

STUDY GUIDE

1 2 FIRST COAST ACADEMY Important — Read Me First!

Consumer Math offers a fresh and interesting approach to real world everyday math. It’s pre- sented in a workbook format, designed for home study. Every adult needs to know basic eve- ryday math. You must know how to manage your financial affairs efficiently to maintain a rea- sonable quality of life. This subject is designed in an easy to understand format, offering everything from a review of basic math skills to owning a home. It’s a straightforward, sensible resource for the math prob- lems every person encounters in life and at work.

How this program works You will receive a workbook and a Study Guide. The study instructions and exams for the workbook are contained in this study guide. You will send in a separate answer sheet for each exam. DO NOT send in your answer sheets separately. Wait until you are done with the complete book and send in ALL the answer sheets together.

These instructions apply to the “Consumer Math” workbook How to use the “Consumer Math” workbook You will study lessons that review basic skills and other lessons that will help you use what you are learning. Chapters ONE and TWO contain lessons on the basic skills of computation needed by every consumer. The balance of the chapters provide lessons on how to actually solve everyday mathematical problems you will face as a consumer in the real world. Once this book is completed, you will have additional confidence in yourself knowing you are better equipped to manage your financial affairs.

Rev. 03/01/2004

3 A Pretext and Mastery Test

• First you will take the self revealing PRETEST exam starting on page 6 in your workbook. You will not send in this exam as it will not be graded. In fact it’s answers are found at the back of the book on page 182. This PRETEST is will serve as a guide for you to use to determine how much you already know and what you will need to learn. Be sure to take this PRETEST as it will tell you what material you may already know and what material you haven’t yet mastered. • At the end of this book, the Mastery Test will tell you what material you have learned and what you may need to review further.

Unit Reviews This book is divided into seven Units. Each Unit concludes with a Unit Review that provides you with an opportunity to demonstrate your understanding of the skills and concepts pre- sented in that particular Unit. The seven Units are: 1. Reviewing Basic Skills (1) 2. Reviewing Basic Skills (2) 3. Earning Money 4. Handling Money 5. Driving A Car 6. Owning A Home 7. Paying Taxes

Problem Solving Strategies In real life we need to understand how to how to solve financial problems. A problem-solving strategy is an effective plan for solving a problem. All Units have two lessons on problem solv- ing strategies. By the time you have completed this book you will have learned fourteen differ- ent problem-solving strategies.

Calculator Applications Calculators can help you with problems that involve lengthy and complicated computations. Each unit contains an application lesson that shows you how to use your calculator as an aid to help you when such problems occur in everyday life.

Exam Answers and Some Solutions • The answers to all of the problems listed in this book are provided in the back of the book. This allows you to check your work after it is completed. • Solutions, or step-by-step explanations, are provided for selected problems, These take you through the steps used to solve the problems.

Graded Exams

You will have 4 graded exams covering this book.

1. Exam 1—Covers Units 3,4 3. Exam 3—Covers Unit 6 2. Exam 2—Covers Unit 5 4. Workbook Final Exam—Covers entire book

4 As a student of First Coast Academy High School, you have the support of your teacher. Refer to your Student Catalog for information on how to contact your teacher and the different op- tions available for you for assistance.

Refer to page 181 in the workbook for the help table, “Where To Go For Help.” This is a special table listing the problems in the Mastery Test and the pages on which the corresponding skills and concepts are taught and practiced.

If you missed one or more problems on your Mastery Test, find the page number(s) that corre- spond to the number of each problem missed. Then turn to these pages, review the teaching, and practice the skills by doing one or more of the problems. Then correct the problems that you missed on this test.

HOLD ALL EXAM ANSWER SHEETS UNTIL YOU HAVE COMPLETED CONSUMER MATH, THEN SEND THEM ALL IN TOGETHER.

5 First Coast Academy Exam A nswer Sheet

Lesson Name Math Book Name Consumer Math Exam Number 1____

Note: Fill in the lesson information as noted by the up arrows - The above is a SAMPLE - It will vary. Write in the correct lesson information.

Please Print—Fill in complete information Students Name ______Student Number ______Address ______City ______state ______Zip ______Phone ______

Check here if address above has changed

Instructions On How To Complete An Answer Sheet This is a sample answer sheet. Be sure to fill out ALL information before submitting to FCA

Write in your answer on the line pro- Generally, you won’t use all the answer vided. It will be A, B, C, OR D, as spaces provided. The number of questions shown below in our sample. on each exam varies.

1 __A___ 16 _____ 31 _____ 46 _____

2 __B___ 17 _____ 32 _____ 47 _____

3 __B___ 18 _____ 33 _____ 48 _____

4 __A___ 19 _____ 34 _____ 49 _____

5 __C___ 20 _____ 35 _____ 50 _____

15 __D___ 21 _____ 36 _____ 51 _____

EXAMINATION CERTIFICATION

By signing this form, I guarantee that I have completed the following exam without the help or assis- tance from anyone other than my First Coast Academy instructor. Be sure to sign and date your exam

Signature ______Date ______

6 EXAM 1 Consumer Math Earning Money

Units 3-4 Exam / 60 Questions

You’ve learned you are the employee who earns wages and your employer is the person or company you work for who pays you a wage for work you have performed. The following questions are multiple choice. Each question has three answer choices. Select the correct one and write the letter of your answer on a separate answer sheet.

Figuring Hourly Wages 1. Billy is a carpenter who earns $15 per hour. He works 8 hours per day, Monday through Friday. How much does Billy earn in one week? a. $450 b. $550 c. $600 2. Mack’s hourly wage is raised from $12.10 per hour to $13.35 per hour. He works 40 hours per week. How much more does he earn per week at this new rate? a. $50 b. $45 c. $52 3. Carol is an installer for the local cable TV company. She earns $14.20 per hour. How much does she earn in 38.5 hours? a. $536.70 b. $546.70 c. $529.13 4. Michael works in a machine shop. He receives $418.40 a week for 40 hours of work. Find his hourly wage. a. $12.16 b. $18.40 c. $ 10.46

7 EARNING MONEY Hourly Wages: Overtime

Evonne earns $10.50 per hour for a 40 hour work week. She earns time and a half (1 1/2 times the nor- mal $10.50 per hour rate) for all hours worked over 40 hours. Answer the following three questions based on Evonne’s information. 5. This week Evonne worked 50 hours, 10 hours overtime. Find her hourly wage for overtime. a. $ 15.25 per hour b. $ 15.75 per hour c. $ 16.25 per hour 6. How much was Evonne’s total paycheck for the 50 hours worked? a. $550.00 b. $651.75 c. $577.50 7. What was Evonne’s total overtime earnings? a. $157.50 b. $105.00 c. $125.50

Exam continued on next page

8 EARNING MONEY Wages and Tips

Most waiters, taxi drivers, hair stylists, delivery drivers, bellhops and other service employees earn tips in addition to their hourly wage, which can be very low. By law, employees that earn tips regularly in their job must report the amount of tips to the employer. This is necessary because employees are required to pay taxes on this income as well as regular wages.

Read the question, select the write answer and write the letter for the correct answer on your separate answer sheet.

Solve the following problems: 8. A hair stylist at Pierre's hair salon earns $6.80 9. Jerry is a parking lot attendant. He earns $2.50 per hour plus tips. The stylist works 40 hours per hour plus tips of about $8 per hour. About per week with tips of about $240 per week. how much does he earn in a 40-hour week? Find the total weekly earnings. a. $493.00 a. $420.00 b. $512.00 b. $398.50 c. $625.00 c. $530.00

10. Helen is a waitress in Mama Mia’s Cafe. She 11. Barbara works as a hairstylist. She works five earns $32 per day in wages, and her tips aver- 8-hour days per week, earning $4.50 per hour age $3 per table. Helen serves about 20 tables plus tips. On the average, she gets $15 per day each day. Including tips, about how much in tips. Including tips, about how much does does she earn per day? she earn each week? a. $101.60 a. $255.00 b. $ 92.00 b. $268.00 c. $176.80 c. $312.40

12. Tony delivers pizzas. He is paid $7.00 per 13. Paula works part-time as a bellhop at a hotel. hour plus tips. Here are the amounts earned She earns $3.75 per hour and works 20 hours from tips one week: Monday $20, Tuesday per week. Here are the amounts of her tips $25, Wednesday $26, Friday $24, Saturday one week: $9, $9.50, $13.25, $16.75. Including $34. Find his total earnings for that week if he tips, about how much does she earn per worked 40 hours. week? a. $510.00 a. $118.50 b. $409.00 b. $123.50 c. $496.38 c . $143.56

9 EARNING MONEY Commission

Commission is a fee on a percentage basis for work done. Many persons, especially salespersons, work on commission alone or on a salary plus commission. If they work on commission alone, they are paid a certain commission rate, or percent of their sales.

Read the question, select the write answer and write the letter for the correct answer on your sepa- rate answer sheet.

14. Sally Forest sells 1-year magazine subscriptions. 15. Billy Bob sells encyclopedias. He earns a She earns a commission of 30% of her sales. commission of 18% for each sale. How much One evening, she sold $250 worth of subscrip- does he earn if the amount of the sale is tions. How much commission did she earn? $810.75? a. $ 62 a. $ 116.83 b. $ 75 b. $ 145.94 c. $ 49 c. $ 129.50

16. Lisa sells cosmetics and receives com- 17. Bobbie Joe sells jewelry on commission. missions of 42%. She sold $98 worth of cos- He earns 40% commission on his sales. metics to one customer. How much commis- If he has sales of $1152.00, how much com sion did she earn? mission does he earn? a. $41.16 a. $ 456.10 b. $52.75 b. $ 460.80 c. $62.60 c. $ 493.20

10 EARNING MONEY Salary plus Commission

Some salespersons earn both commission and a salary or hourly wage. The commission may be on all sales, or just sales above a certain base amount.

Read the question, select the write answer and write the letter for the correct answer on your sepa- rate answer sheet.

18. Terry sells cars. She earns a salary of $900 per 19. Cary works in a computer store. She is paid a month, plus a commission of 2% on all sales. weekly salary of $220 and a commission of In December, Terry sold $162,000 worth of cars. 5% of all sales. One week, she sold $12,650 What were her total earnings in December? worth of merchandise. How much did Cary earn that week? a. $4140.00 a. $593.85 b. $3469.00 b. $852.50 c. $3679.00 c. $649.95

20. Laura’s works in a furniture store. She 21. Bob sells books wholesale to stores. His com- earns $200 a week plus 7% of all sales over pany pays him a monthly salary of $1150, plus a $2500. One week in January, Laura's total commission of 3% on the amount of sales. One sales were $11,900. What were Laura's earnings busy month, Bob sold $272,000 worth of for that week? books. How much did he earn that month? a. $596 a. $7964 b. $858 b. $9310 c. $622 c. $6610

22. Shelly has two job offers for sales jobs. For job 23. Rich works in a home lighting store. He A, she would earn a monthly salary of $3000 is paid $250 per week and 3% on all sales over and no commission. For job B, she would earn $1000. During one year, his average weekly $1600 per month and commission of 5% on all sales were $8800. About how much did he sales. Which would pay more if his sales are earn during the year? $50,000 per month? a. Job A a. $25,168 b. Job B b. $23,625 c. Neither c. $26,000

11 EARNING MONEY Retail Store Profits

Another very common way of earning money is to operate a retail store. In order to make money, the store operator must set prices high enough to pay the cost of the merchandise and the expenses of op- erating the store. The gross income is the total amount of money taken in from sales of merchandise. After cost of merchandise and other expenses are subtracted, the amount left is the profit.

Read the question, select the write answer and write the letter for the correct answer on your separate answer sheet.

24. The Dollar Discount Store did a total business 25. A jewelry salesman did a total business of of $166,000 during one month. The merchan- $42,500. Cost of merchandise was $21,400, dise costs were $102,000. Other expenses and expenses were $12,200. What was the amounted to $29,000. What was the profit? profit? a. $35,000 a. $9800 b. $36,500 b. $8900 c. $39,300 c. $7985

26. Bill’s Meat Market did a total business 27. In April, what percent of Bill’s Meat Market’s of $59,000 in April. Cost of the meat was gross income was profit? See 26 for details) $37,500. Expenses amounted to $11,200. How much profit was made? a. $10,300 a. About 8.9% b. $9,200 b. About 17.5% c. $11,100 c. About 19.9%

28. Jar man's Clothing had total sales of $65,000 29. In July, what percent of Jar man’s Clothing's for July. Merchandise costs were $37,000. Other gross income was profit (see 28 for details)? expenses were $12,000. What was the profit? (Numbers are rounded off to closest %) a. $11,000 a. About 24.6 % b. $16,000 b. About 22.3 % c. $13,000 c. About 25.5%

12 EARNING MONEY Markup, Overhead, and Profit

The difference between the cost and selling price is called markup. Expenses incurred in selling, such as rent, heating, lighting, wages, etc., are called overhead. Thus, markup must include both overhead and profit. After years of experience, a store owner or manager can estimate how much the overhead will be and how much markup to allow between the cost and the selling price. Sometimes the markup is ex- pressed as a percent of the cost of an item.

Read the question, select the write answer and write the letter for the correct answer on your separate answer sheet.

30. A store manager paid $45 each for coats. 31. A store owner bought belts at $108 per dozen. The markup is 65%. For what price If the markup is 45%, what price should be should the coats be sold? marked on each belt?

a. $58.34 a. $9.50 b. $71.68 b. $12.10 c. $74.25 c. $13.05

32. Fresh foods must have a larger markup, since 33. A music store bought a guitar for $300 and they are perishable. A store purchased apples used a markup of 50% to set the selling price. for 49¢ per pound. If the markup is 100%, how A customer bought the guitar on sale for much will the apples be sold for? 50% off. How much did, the customer pay?

a. 98¢ per pound a. $400 b. 92¢ per pound b. $290 c. 79¢ per pound c. $225

13 EARNING MONEY Retirement Income

An employee may receive a pension from the company she retires from. The amount of a pen- sion payment is based on the person's salary while employed, the age at retirement, and various other factors.

In addition to social security and pensions, certain types of savings accounts and investments are designed to provide retirement income. By planning and saving money before retirement, a worker can increase retirement income to help her live comfortably.

Read the question, select the write answer and write the letter for the correct answer on your separate answer sheet.

34. Peggy gets $480 per month from social 35. Scott Brandon gets a monthly pension of $984 security, and has no other income. What is her and a monthly social security check of $475. yearly income? What is his yearly income from these two sources? a. $5420 a. $15,610 b. $5760 b. $16,408 c. $5640 c. $17,508

36. John is 63 years old. If he waits until 37. Each month Mary gets $790 from her company age 65 to retire, he will get $720 per month in pension and $534 from social security. social security payments. If he retires now, he Her living expenses are about $1660 per will get 80% of that amount. How much will month. About how much money from savings the payments be if John retires now? will she need each month?

a. $576.00 a. $254 b. $497.50 b. $198 c. $612.80 c. $336

14 HANDLING MONEY Comparing Prices

You can save money by comparing prices at different stores and by buying at discounted prices. A dis- count is an amount subtracted from the regular price, often a percent of the regular price.

Some items are not priced individually. When comparing prices you may need to find the unit price, or the cost for one. If the cost does not divide evenly, round up to the next cent.

Read the question, select the write answer and write the letter for the correct answer on your sepa- rate answer sheet.

38. The price of bath towels at Tom’s Store is 3 for $18. 39. The price of file boxes at Tom’s Store is 6 for How much is the single towel price? $24.00. How much is the single box price?

a. $6.75 a. $4.00 b. $6.00 b. $3.80 c. $7.20 c. $3.29

40. The price of slacks at Tom’s Store is 2 for $50. 41. The regular price of shoes is $50. If the shoes How much is the unit price? are on sale at a discount of 30%, what is the sale price? a. $25.00 a. $31.50 b. $22.00 b. $29.90 c. $22.00 c. $35.00

15 HANDLING MONEY Preparing a Monthly Budget

A budget is a plan of how and in what amount income is to be spent. To prepare a budget, you should look at your current spending records and estimate the amount needed for each budget category. Make sure to include savings and donations, and to allow for occasional expenses such as car insurance and repairs. Add the amounts budgeted for each category and compare this to your income (take-home pay). If the expenses are more or less than the income, balance the budget by adjusting the amounts for certain categories.

LISA’S EXPENSES Food & clothes $240

Housing & utilities $560

Transportation $110

Savings & giving $100

Miscellaneous $150

42. The above list shows Lisa's expenses 43. Lisa’s monthly income is $1350. Are the for an average month. Find the total. expenses less or more than the income? a. $1050 a. More b. $1160 b. Less c. $ 980 c. The same

44. Lisa can balance her budget by putting 45. Lisa wants to buy a car. If she does, her more money in savings. How much more per transportation costs increase to $260 per month can she save? month. Can she afford to buy a car without reducing other amounts in the budget? a. $108 a. No b. $120 b. Yes c. $190 c. Maybe

46. George’s income is $1600 per month: Here is 47. Mary is retired and has an income of his monthly budget except for food and $700 per month. Here is her monthly budget clothes. To balance the budget, how much can except for miscellaneous expenses. To balance he spend for food and clothes? the budget, how much can she spend for mis- Housing & utilities $400 cellaneous expenses? Transportation $350 Food & clothes $170 Savings & giving $150 Housing & utilities $260 Miscellaneous $200 Transportation $ 80 Savings & giving $100

Food & clothes Miscellaneous a. $450 a. $ 90 b. $500 b. $140 c. $400 c. $150

48. Jason buys clothing during January and 49. The Derrick family takes a vacation each year July when the prices are lowest. If he spends a that costs about $2200.00. What amount should total of $600, how much should he set aside be saved or set aside each month for vacation each month for clothing? expenses? a. $42 a. About $135.66 b. $39 b. About $183.34 c. $50 c. About $142.44

16 HANDLING MONEY Stocks

A person investing in stocks is a partial owner of the company or business that issues the stock. The company uses money from the sale of stocks to help run the company. If the company makes a profit during the year, owners of stock may be given dividends, or portions of the profit.

Read the question, select the write answer and write the letter for the correct answer on your separate answer sheet.

50. Brandon bought stock in a manufactur- 51. Scott bought 100 shares of stock at $100 each. ing company. The first year he was paid a div- Three years later, he sold the stock for $90 per idend of $6 per share on the 200 shares he share. How much money did he lose? owned. How much did he receive in all. a. $5000.00 a. $1000.00 b. $1200.00 b. $ 850.00 c. $1560.00 c. $ 650.00

52. Bob's mother gave him 20 shares of stock in a 53. The second year, Bob received $3.50 per share local company. She paid $58 per share for in dividends. How much more money did Bob them. At the end of the first year, the company receive the second year than the first year? paid a dividend of $3.10 per share. How much did Bob receive in dividends? a. $27.00 a. $ 8.00 b. $36.00 b. $ 18.00 c. $62.00 c. $ 29.00

17 HANDLING MONEY Single-Payment Loans

The bank earns interest from borrowers, but pays interest to depositors using their money in various forms of saving accounts and financial investments to make loans. The bank, of course, must charge a higher rate of in- terest on loans than it pays on savings accounts and other financial investments it offers its clients. Otherwise it could not make enough money to stay in business.

A single-payment loan is one that is repaid with one payment after a specified period of time. Interest on a single-payment loan is figured using the simple interest formula, I = p x r x t. If the loan is for more than a year, the customer may be required to pay the interest each year. The interest quoted is for one year. If the borrower uses the money for less than one year they pay for the amount of the time the money was actually used.

Read the question, select the write answer and write the letter for the correct answer on your separate answer sheet.

54. Carroll borrowed $500 at 14% interest for 6 55. Ellie borrowed $1850 at 14% interest months. How much interest did she pay? for 6 months. How much interest would she owe on the loan? a. $23.75 a. $ 65.43 b. $35.00 b. $179.85 c. $42.50 c. $129.50

56. Shaun borrowed $600 from the bank 57. A farmer borrowed $6000 from the bank for at 12% interest for 12 months. Including 4 months and agreed to pay 12% annual interest. interest, how much did he have to repay? Including interest, how much did he have to repay? a. $672.00 a. $6240.00 b. $498.45 b. $6800.00 c. $634.27 c. $5960.00

18 HANDLING MONEY Installment Loans: Total Interest

To find the total interest on an installment loan, multiply the number of months by the amount paid each month. Then subtract the amount borrowed.

Read the question, select the write answer and write the letter for the correct answer on your separate answer sheet.

Part of each installment is interest and the rest is Payment Schedule applied to the principal, or amount owed. Be- 6-Month Installment Loan of $3000, 18% Interest cause the amount owed on the loan decreases each month, the interest each month also Payment Payment Interest Principal Balance decreases. This is shown by the payment schedule Number Paid Paid $3000 at the right. The amounts shown have been 1 $527 $45 $482 $2518 Rounded off. 2 $527 $38 $489 $2029 3 $527 $31 $496 $1533

4 $527 $24 $503 $1030 5 $527 $16 $511 $519

Answer each question about the payment schedule 6 $527 $ 8 $519 0 at the right.

58. What is the sum (total) of the amounts in the 59. What is the sum (total) of the amounts in the column for interest paid? column for Principal Paid? a. $184 a. $2900 b. $174 b. $3000 c. $162 c. $3050

19 HANDLING MONEY Credit Cards

A credit card allows you to pay less than the full amount you owe each month. But when you do not pay the full amount, you must pay a finance charge. This charge is found by multiplying the unpaid bal- ance by the monthly interest rate, which is 1 of the annual interest rate. 12

60. Kirk's unpaid balance for last month was $362. He made a payment of $60 and did not use his credit card this month. What is the amount on which he will be charged a finance charge? a. $302 b. $222 c. $196

You have just completed the 60 Question Exam for Units 3,4. Be sure you have answered ALL 60 QUESTIONS on your answer sheet. The next page starts the Exam for Unit 5 HOLD YOUR ANSWER SHEET UNTIL YOU HAVE COMPLETED ALL YOUR EXAMS IN CONSUMER MATH You will need to start a NEW ANSWER SHEET for the next section.

20 Unit 5—Exam 2 Sheba (Compact Car) BASE PRICE $8980 Driving A Car Buying a New Car: Sticker Price OPTIONS: Power windows $265 Read the question, select the write answer and write the Automatic transmission $599 letter for the correct answer on your separate answer sheet. Air conditioning $915 Power brakes $ 84 This exam will have 34 problems for you to answer ON Tinted glass $ 75 ONE ANSWER SHEET. Cruise control $224 DESTINATION CHARGE $378

Buying a new car requires careful consideration of various costs. At the factory, a sticker is put on. The sticker price includes the base price of the car plus the cost of special equipment (options) plus the cost of shipping the car from the factory to the dealer (destination charge). The costs for sales tax and license fees are not included on the sticker and are added later. We will use the name of a fictitious car named the Sheba in our following questions.

For Questions 1 and 2, refer to the chart above. 1. A customer orders a Sheba with automatic 2. A customer orders a Sheba with all six of the transmission and air conditioning. What is the options that are listed. What is the sticker sticker price? (Don't forget the destination price? charge.) a. $10,654 a. $12,567 b. $11,654 b. $11,876 c. $10,872 c. $11,520

3. The base price of a Sheba is $9052. The 4. The base price of a conversion van is $13,108. customer has selected options that have a total The customer selects options that cost $859. cost of $713. The destination charge is $385. The destination charge is $480. What is the What is the sticker price? sticker price? a. $10,150 a. $14,687 b. $10760 b. $15,156 c. $11,930 c. $14,447

21 DRIVING A CAR Buying a New Car: Dealer's Cost

A customer might save money by offering a price that is between the sticker price and the dealer's cost (usually 75% to 80% of the sticker price). For the Sheba the dealer pays 78% of the base price, 75% of the cost of options, and all of the destination charge.

Read the question, select the write answer and write the letter for the correct answer on your sepa- rate answer sheet.

The answers are rounded to the nearest dollar.

5. A dealer buys a Sheba with no options. 6. For the Sheba in Question 1, what is the difference The dealer's cost is 77% of the base price between the sticker price and the dealer's cost? of $8599, plus a ,destination charge of Dealer pays 78% of the base price, 100% of the $295. Find the dealer's cost. cost of options and destination charges. a. $7799 a. $2229 b. $7700 b. $1976 c. $6916 c. $2099

7. The dealer's cost for a full size Sheba includes 80% 8. The dealer's cost for a midsize Sheba includes of the base price of $13,600 and 76% of the 76% of the base price of $10,996 and 76% of the options cost of $2477. The dealer's cost also options cost of $1863. The dealer's cost also includes a destination charge of $362. What is includes a destination charge of $312. What is the dealer's cost? the dealer's cost? a. $13,500 a. $10,085 b. $14,267 b. $9850 c. $13,125 c. $10,296

22 DRIVING A CAR Buying a Used Car

A person who is buying a used car may save money by offering less than the asking price. This is be- cause car dealers generally set prices that are higher than what they expect to receive. After a buyer makes an offer, the dealer often adjusts the price to an amount between the buyer's offer and the dealer's original price. So, wise buyers make offers that are less than the dealer's original price.

Used Car Wholesale Suggested Model Price Retail Price

Accord $10,200 $12,950 Read the question, select the write answer and write the letter for Bronco $15,900 $19,850 the correct answer on your separate answer sheet. Camaro $10,200 $13,050 Ciera $8,875 $11,500

Mustang $9,650 $12,700 Shadow $8,450 $9,575

Use the prices shown in the chart to solve the following problems.

9. What is the difference between the 10. Suppose you believe that a 10% profit for the suggested retail price and the wholesale dealer is a fair amount to give as your first offer. price for the Bronco listed in the chart. What would be your first offer for the Mustang listed in the chart?

a. $3,960 a. $10,200 b. $3,950 b. $ 9,775 c. $4,175 c. $10,615

23 DRIVING A CAR Renting a Car

In some instances it may be less expensive to rent than to buy. A car rental company usually has daily or weekly rates. Some companies also charge an additional amount for the mileage. The chart below shows the rates at Tina’s Car Rental.

Read the question, select the write answer and write the letter for the correct answer on your separate answer sheet.

Tina’s Car Rental

Type Daily Rate* Weekly Rate*

Compact $28.95 $182.00

Mid-size $32.95 $199.00

Full-Size $39.95 $239.00

Van for 8 $45.95 $259.00

* 150 free miles per day. Add $0.20 for each additional mile.

11. Jack wants to rent a compact car for 17 days. 12. Lisa does not own a car. She rents a This is two weeks and 3 days. compact car about 6 days per month, and Total the basic charge at Tina's Car Rental for drives less than 150 miles each time. How that length of time plus 7% sales tax. much does she spend each month for rental How much is the total charge? costs? Would she save money by buying a new car that would require payments of $250 per month? a. $392.35 a. $173.70; no b. $468.40 b. $257.60; yes c. $482.41 c. $197.39; no

24 DRIVING A CAR Financing a Car: Monthly Payment

Usually a new car loan is for 3 years or more. Sometimes you can get a lower interest rate if you take out a loan for a shorter period of time. The table at the lower right can be used to find monthly payments.

Read the questions, select the write answer and write the The following amounts are per hundred dollars letter for the correct answer on your separate answer sheet. Int. Rate 3 yr 4 yr 5 yr 11 % $3.27 $2.59 $2.18 12% $3.32 $2.63 $2.22 13% $3.37 $2.68 $2.27

14% $3.42 $2.73 $2.33

15% $3.47 $2.78 $2.38

16% $3.52 $2.83 $2.43

Find the monthly payment. Use information from the table of monthly payments to the above.

Amount Int. Rate Years Amount Int. Rate Years

$1800 13% 3 $4200 12% 4

13. Find the monthly Payment. 14. Find the monthly Payment. a. $114.67 a. $60.66 b. $110.46 b. $73.68 c. $119.32 c. $65.49

15. Martha buys a car for $12,465. She has no car to 16. Murray buys a car for $10,995. He gets a trade trade in. Her down payment is $1465. If she in allowance of $3995 for his old car. If he takes out a loan at 13% interest for 5 years, takes out a loan at 11% interest for 4 years, how much will the monthly payments be? how much will the monthly payments be? a. $249.70 a. $190.90 b. $237.50 b. $181.30 c. $219.37 c. $315.40

25 DRIVING A CAR Monthly Payment per $100 Financing a Car: Total Interest Paid Int. Rate 3 yr 4 yr 5 yr 11 % $3.27 $2.59 $2.18 12% $3.32 $2.63 $2.22 Read the question, select the write answer and write the letter for the correct answer on your separate answer sheet. 13% $3.37 $2.68 $2.27 14% $3.42 $2.73 $2.33

15% $3.47 $2.78 $2.38 16% $3.52 $2.83 $2.43

17. Marty buys a car for $14,285. He makes a 18. Karen buys a car for $18,300. She makes down payment of $2285. If he takes out a loan a $1300 down payment and takes out a at 12% interest for 4 years, how much will the 5 year loan at 11% interest. Her monthly monthly payments be? payment is $370.60. How much interest will she pay? a. $322.90 a. $5,602.60 b. $365.70 b. $5,236.00 c. $315.60 c. $3,279.67

19. Bill buys a car for $22,700. He makes a down payment of $2,500. If he takes out a loan for $20,200 for 5 years at 12% interest. How much will he pay for the car including interest?

a. $26,906.40 b. $28,367.34 c. $30,360.52

26 DRIVING A CAR Miles per Gallon

Read the question, select the write answer and write the letter for the correct answer on your separate answer sheet. Read the question, select the write answer and write the letter for the correct answer on your separate answer sheet.

20. Carl’s car used 25 gallons of gasoline in 760 21. Joy's car used 12 gallons of gasoline in 298 miles. How many miles per gallon was this? miles. How many miles per gallon was this? a. 25.2 a. About 19 mpg b. 28.5 b. About 21 mpg c. 30.4 c. About 25 mpg

22. Suppose gasoline costs $1.43 per gallon and 23. Teresa took a 620-mile trip. She used 20 gal you use 26 gallons per week. How much lons of gasoline and paid $1.43 per gallon. would you need to spend for gasoline each What was the cost per mile for gasoline? week? a. $37.18 a. About 4.6¢ b. $31.47 b. About 5.1¢ c. $27.68 c. About 6.5¢

27 DRIVING A CAR Estimates for Car Repairs

When major repairs are needed, the owner of a car may want to get estimates from two or three different shops. Three estimates for the same work are shown below.

Read the question, select the write answer and write the letter for the correct answer on your sepa- rate answer sheet.

Repair Shop A Shop B Shop C Replace brakes $173.78 $251.00 $178.50 Align front end 40.00 36.88 38.45

Service air conditioning 19.88 23.35 21.66 Service transmission 52.50 46.78 48.50 Tune up engine (6 cyl) 49.65 38.44 39.88

TOTALS:

ESTIMATES 24. Which shop has the lowest estimate for these 25. Which shop charges the least for replacing repairs? brakes? a. Shop A a. Shop A b. Shop B b. Shop B c. Shop C c. Shop C

26. How much would you save by having the 27. Suppose you want to have the brakes replaced transmission serviced at Shop B rather than at and the engine tuned at the same shop. From Shop A? which shop would you get the best price? a. $ 5.72 a. Shop A b. $ 6.12 b. Shop B c. $12.14 c. Shop C

28 DRIVING A CAR Public Transportation

If a person uses public transportation frequently, buying a monthly pass may be a way to save money.

Read the question, select the write answer and write the letter for the correct answer on your separate answer sheet.

28. Suppose you ride a bus to and from work 22 29. Here is a fare schedule for a bus company. days per month. A single-ride ticket (each way) Monday-Friday Saturday-Sunday costs' $1.30. A monthly ticket costs $39.00. Adults $1.60 $1.10 Which ticket will cost less to use each month? Children $ .90 $0.70 How much will a family of 2 adults and 2 children pay for a round trip on a Monday? a. The monthly ticket is less a. $10.00 b. The single-ride ticket is less b. $11.00 c. Actually both tickets are the same c. $12.00

30. Suppose you ride a train to and from work 20 31. Terry drives to work some days and rides a days per month. A single-ride ticket costs bus other days. The bus costs $1.75 each way. $3.90. A monthly ticket costs $110.00. How When he drives, he pays $4.00 per day for much will you save each month by using a parking and about $2.40 for gasoline. How monthly pass? much less does it cost each day to ride the bus? a. $46.00 a. $4.50 b. $47.50 b. $1.95 c. $51.75 c. $2.90

29 DRIVING A CAR Airline Schedules

The table at the lower right is a sample airline schedule. It gives hours of departure and arrival, flight numbers, and number of stops. Note that the times are either central daylight time (CDT) or eastern daylight time (EDT). CHICAGO Leave Arrive Flight Stops (CDT) 8:50 A.M. 2:47 P.M. 239 4-Stop To 2:40 P.M. 4:53 P.M. 531 Non-Stop Read the question, select the write answer and write HOUSTON (CDT) 7:15 P.M. 10:47 P.M. 68 1-Stop the letter for the correct answer on your separate an- 9:00 P.M. 12:22 A.M. 374 1-Stop swer sheet. 11:20 P.M. 1:33 A.M. 286 Non-Stop

KANSAS CITY 7:25 A.M. 9:15 A.M. 169 1-Stop Use the airline schedule at the right to answer (CDT) 9:50 A.M. 10:56 A.M. 184 Non-Stop each question. To 11:25 A.M. 1:20 P.M. 246 1-Stop MINNEAPOLIS (CDT) 2:15 P.M. 4:10 P.M. 381 1-Stop 32. Flight 329 makes 1 stop before arriving in 5:05 P.M. 6:11 P.M. 62 Non-Stop 6:00 P.M. 7:55 P.M. 418 1-Stop Minneapolis. Look at flight 172. How much less 7:45 P.M. 9:40 P.M. 329 1-Stop

time does the nonstop flight take? 9:10 P.M. 10:16 P.M. 172 Non-Stop a. 52 minutes less 9:15 P.M. 10:59 P.M. 96 1-Stop 7:00 A.M. 11:30 A.M. 218 3-Stop b. 38 minutes less WASHINGTON (EDT) 8:05 A.M. 11:03 A.M. 8 1-Stop c. 49 minutes less To 9:45 A.M. 12:01 P.M. 36 Non-Stop MIAMI 33. Mr. Bolton lives in Chicago. He has a ticket (EDT) 2:00 P.M. 4:13 P.M. 472 Non-Stop 4:30 P.M. 6:45 P.M. 10 Non-Stop

on the first afternoon plane to Houston. 6:45 P.M. 8:57 P.M. 302 Non-Stop What time does the plane leave? 9:30 P.M. 12:43 A.M. 181 1-Stop Note: Departing and arriving times are based on time zones in each city. a. 2:18 P.M. b. 2:40 P.M. c. 3:10 P.M. 34. What time will it be in Houston when Mr. Bolton arrives? a. 4:53 P.M. b. 4:47 P.M. c. 5:12 P.M. You have just completed the 34 Question Exam for Unit 5 The next page starts the Exam for Unit 6 HOLD ALL answer sheets until you have completed Consumer Math You will need to start a NEW ANSWER SHEET for the next section.

30 Unit 6 - Exam 3 OWNING A HOME

Generally, owning a home is one of the largest investments a person will ever make. It’s important to un- derstand the financial aspects of making a major purchase.

Read the question, select the write answer and write the letter for the correct answer on your separate answer sheet.

1. Sarah bought a house for $140,000. She 2. Michael buys a condominium for $95,000 paid 20% down and took out a mortgage loan and makes a down payment of $35,000. for the remaining money. How much was her His mortgage loan is for 15 years loan? at 8 % . The mortgage payment is $9.56 per a. $112,000 thousand of the loan amount. What is his b. $94.700 monthly payment? c. $101,350 a. $583.60 b. $610.34 c. $573.60

3. Last month Bill’s electric meter read 1965 4. Jill wants to buy $70,000 worth of insurance for kilowatt-hours. This month it reads 2714 kilo- her new house. If the rate is $8.00 per $1000 of watt-hours. At 8¢ per kilowatt-hour, what will value, what will her insurance premium be? Ralph's electric bill be for the month? a. $54.39 a. $590 b. $61.53 b. $560 c. $59.92 c. $530

5. Millie found an apartment for $550 per month. 6. Kelly put in a driveway 15 feet by 40 feet. To move in, she will need to pay first if it cost him $3.50 per square foot, how much and last month's rent, plus a security deposit did he pay for the driveway? of $375. What will she spend to move into the a. $525 apartment? b. $475 a. $1475 c. $2100 b. $1460 c. $1934

31 7. Workers dug a hole for the basement of Max’s 8. Estimate the cost of roofing a building if the house. The hole was 45 feet wide, 60 feet long, roof area is 4200 square feet. The shingles will and 10 feet deep. How many cubic feet of dirt were cost $45 per square and the labor charge is removed from the hole? $38 per square. (One square of shingles cov ers 100 square feet.) a. 27,000 a. $2500 b. 16000 b. $2600 c. 1800 c. $3486

9. Cher needed to hire an electrician to repair 10. By paying cash instead of charging, Marcy an electrical problem. He charged for 2 hours bought a $400 stereo for $340. What and 45 minutes of labor. The rate was $45 percent did she save? for the first hour and $10 for each a. 15% additional 15 minutes. How much did Cher b. 11% pay for the labor charge? c. 14% a. $84.00 b. $115.00 c. $102.50

32 OWNING A HOME Buying for the Home

When you move to a new home, you might need to buy new furniture and appliances. A careful shopper can often find bargains that will save them money.

Read the question, select the write answer and write the letter for the correct answer on your separate answer sheet.

11. When she moved into her new home, Jeffie 12. Killroy found a store that was going out of bought new furniture which would have cost business. He bought a washer originally $1650. By paying cash, she was given a 5% priced at $435 at 25% off. How much did he discount. How much did she save? save? a. $82.50 a. $102.34 b. $65.70 b. $110.67 c. $71.32 c. $108.75 13. Boris bought a new refrigerator. Its 14. Frank bought a clothes dryer during a usual price was $795. By paying cash he 20%-off sale. The refrigerator regularly sold saved 10%. How much was saved? for $550. How much did he pay? a. $79.50 a. $440.00 b. $89.50 b. $492.00 c. $99.50 c. $397.60 15. By paying cash Mary was able to buy a 16. Shauna wants to buy a new air conditioner $500 stove for $400. What percent did she which sells for $500. If she waits until winter, save? she can buy it at a 20% discount. How much would it cost in the winter? a. 20% a. $310 b. 11% b. $390 c. 12.1% c. $400 17. Mike bought a stove for $500. He paid $250 18. Kerry bought a $550 freezer and paid down and the balance, including interest, in $150 down. The balance was to be paid in 6 12 monthly installments of $30. How much monthly payments of $70 each. How much did the stove cost, including interest? interest did she pay in all? a. $580.00 a. $20.00 b. $610.00 b. $24.60 C. $720.40 c. $26.40

33 OWNING A HOME Rental Costs

Renters often pay a security deposit. Usually a written lease explains what types of repairs you are ex- pected to make and whether or not you must pay your own utilities. Read the question, select the write answer and write the letter for the correct answer on your separate answer sheet.

19. Georgia found an apartment for $750 per month. 20. Bob rents an apartment for $500 per month. He To rent it, she will need to pay first month's estimates that he will pay $50 per month for rent and a $500 security deposit. Utilities will electricity and $60 per month for parking. be $95 extra. What will she spend to rent the How much will he be spending per month on apartment the first month including utilities? rent, electricity, and parking? a. $1,115.00 a. $510.00 b. $1,345.00 b. $525.00 c. $1,075.00 c. $610.00

21. Jill and Terry decided to share an apartment 22. When Jan moved out of her apartment, that costs $750 a month. They also pay $90 a she checked her lease and found that she month for electricity, $40 for gas, $10 for water, needed to have the carpets cleaned in order to and $8 for garbage pickup. If they share the cost get back her security deposit of $450. The equally, how much will each person pay a landlord charged her $45 for the cleaning. month? How much was left of the $450 after Phyllis paid for the carpet cleaning? a. $350.00 a. $405.00 b. $390.00 b. $365.00 c. $449.00 c. $395.50

23. The average cost of heating a one-bedroom 24. When Jerry Lynn rented her new apartment, she apartment in Chicago is $90 per month during agreed to have the living room repainted every the 6-month winter season. Marie wants to rent 5 years. The painting costs $300. How much an apartment for a year. Which is less expen- extra per month is Heather spending for the sive, one with heat included for $460 per apartment if she stays for 5 years? month, or one without heat included for $390 per month? a. With heat a. $6.00 b. Without heat b. $6.72 c. Both the same c. $5.00

You have just completed the 24 Question the Unit 6 Exam The next page starts the Exam for Unit 7 HOLD all your answer sheets until you have completed Consumer Math and start a NEW ANSWER SHEET for the next section.

34 Unit 7 - Exam 4 PAYING TAXES Read the question, select the write answer and write the letter for the correct answer on your sepa- rate answer sheet. This exam will have 16 problems for you to answer ON ONE ANSWER SHEET.

1. Scott's monthly salary is $2,296. How much is 2. Neal’s W-2 form showed that he earned withheld from Scott’s pay each month for $19,865 in wages. Of this, $496.63 was with social security tax? Use a social security tax held for local tax. What percent of his wages rate of 7.65%. were withheld for local tax? a. $164.25 a. 1% b. $175.64 b. 10% c. $158.20 c. 2.5%

3. Vernon is filing form 1040EZ. His adjusted 4. Mr. and Mrs. Platt file a joint tax return gross income was $25,675. He takes a $3000 using form 1040A. Their adjusted gross in standard deduction and a $2000 personal ex- come is $55,890, and they take the $6200 stan emption. What is his taxable income? dard deduction for married couples. If they a. $16,985 claim 4 exemptions at $2350 each, what is b. $20,675 their taxable income? c. $18,765 a. $40,290 b. $27,807 c. $30,234

5. During the past year, $4882 of Marilyn's pay was 6. The market value of a home is $98,000 and withheld for federal income tax. If her tax lia- the rate of assessment is 48%. The tax rate is bility is $4974, will she owe or get a refund? $52 per $1000. What is the yearly How much? real estate tax? a. Owe $297 a. $1,223.20 b. $297 refund b. $2,446.08 c. Owe $92 c. $1,032.10

7. Jason's filing status is head of household. 8. Bobbie is self-employed and made a profit of He can deduct $4,359 in mortgage interest $22,150 last year. She must pay $2572 in and real estate tax, $1,650 for charitable contri- income tax. She also must pay social security butions, and $854 in state and local taxes. tax of 13.3% of her profit. What is Bobbie's What is the total of these deductions? total tax liability? Round to the nearest dollar. a. $6863; itemize a. $5912 b. $6983; standard deduction b. $4998 c. $6998; itemize c. $5518

35 9. Jeff bought three items of clothing costing 10. Kendra bought 16 gallons of gasoline for $85.50, $18.55, and $19.75. The sales tax rate $1.54 per gallon. The price of each gallon was 6.5%. How much sales tax did he pay on included 28.2 cents for gasoline tax. What the three items? percent of the price was tax? a. $6.98 a. 18.3% b. $7.76 b. 20.9% c. $8.05 c. 19.8%

36 PAYING TAXES Excise Tax

Federal, state, and local governments may collect additional taxes, called excise taxes, on gasoline, ciga- rettes, liquor, and other specific items. These taxes may not be obvious to the consumer since some are paid by the manufacturer or supplier, but are passed on to the consumer as part of the purchase price. Over 25 % of the amount a customer pays for gasoline is excise tax. Gasoline taxes are collected by the federal government (18.4 cents per gallon), the states (from 7 cents to 20 cents per gallon), and local gov- ernments (amount varies). The money collected for gasoline taxes is used to build and repair streets and highways.

Read the question, select the write answer and write the letter for the correct answer on your separate answer sheet.

11. Suppose you buy 20 gallons of gasoline for 12. Suppose you buy 20 gallons of gasoline in a $1.44 per gallon. If the excise tax is 28 cents city that collects excise tax of 16.0 per gallon. If per gallon, how much excise tax is collected? you pay $1.25 per gallon, what percent of the price is city excise tax? a. $3.98 a. 13.4% b. $4.54 b. 13.2% c. $5.60 c. 12.8% 13. Suppose you live in a state that collects 18.2¢ 14. You buy 22.4 gallons of gasoline for $28.35. excise tax on a gallon of gasoline. If you buy The price includes $8.25 for excise tax. What 18.5 gallons of gasoline, how much state ex- percent of the price is excise tax? cise tax is collected? a. $3.06 a. 28.6% b. $3.37 b. 27.4% c. $2.99 c. 29.1% 15. Gary lives in a state that collects 15.25¢ 16. A customer paid $29.45 for 22.6 gallons of gas- excise tax per gallon of gasoline. If he buys oline. The excise tax is 30.8¢ a gallon. How 19.3 gallons of gasoline, how much state ex- much would a gallon of gasoline cost without cise tax is collected? the excise tax? a. $2.95 a. 94.6¢ b. $3.45 b. 97.8¢ c. $1.92 c. 99.2¢ You have just completed the 16 Question Unit 7 Exam You will need to send in ALL your answer sheets

37 38 39

Atlantic International Institute, Inc. P.O. Box 440560, Jacksonville, Florida 32222 Phone (904) 381-1935 Fax (904) 381-0135 Email [email protected] Website http://fcahighschool.org

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