Q: A loan of $$ \5$$,000 $ is taken at 7% simple interest for 4 years. What is the total amount to be repaid at the end of the term?

$$ \5$$,000 + (5,000 \times 0.07 \times 4) = \$$5,000 + \1$$,400 = \$$6,400 $$

Q: Which formula would you use to convert a percentage to a decimal?

$$ \text{Decimal} = \frac{\text{Percentage}}{100} $$

Question 1

A store advertises a 20% discount on a jacket originally priced at $80. What is the sale price of the jacket after the discount?

Accepted Answer

$$ \64$$ $

Question 2

If a product costs $$ \50$$ $ and the sales tax rate is 8%, what is the total amount paid including tax?

Accepted Answer

$$ \54.00$$ $

Question 3

Which formula is used to calculate simple interest?

Accepted Answer

$$ I = P 	imes r 	imes t $$

Question 4

A savings account earns 5% simple interest annually. If you deposit $$ \1$$,000 $ for 3 years, how much interest will you earn?

Accepted Answer

$$ \150$$ $

Question 5

Which formula is used to calculate compound interest?

Accepted Answer

$$ A = P \left(1 + \frac{r}{n}\$$right)^{nt}$$ $$

Question 6

You invest $$ \2$$,000 $ at an annual interest rate of 6% compounded quarterly for 2 years. What is the value of your investment at the end of 2 years? (Round to the nearest dollar)

Accepted Answer

$$ \2$$,253 $

Question 7

A normal distribution is characterized by which two parameters?

Accepted Answer

Mean and standard deviation

Question 8

If the mean of a normal distribution is $$ \mu = 50 $$ and the standard deviation is $$ \sigma = 10 $$, what is the z-score for a value of $$ x = 70 $$?

Accepted Answer

$$ z = 2 $$

Question 9

A population has a mean of $$ \mu = 100 $$ and a standard deviation of $$ \sigma = 15 . $$What percentage of values fall within one standard deviation of the mean in a normal distribution?

Accepted Answer

About 68%

Question 10

A person earns $$ \45$$,000 $$ per year. If the federal income tax rate is 12% on the first $$ \$$40,000 $$ and 22% on the remaining income, what is the total federal tax owed?

Accepted Answer

$$ \5$$,900 $

Question 11

If a product is originally priced at $$ \120$$ $ and is marked down by 25%, what is the new price?

Accepted Answer

$$ \90$$ $

Question 12

Which of the following best describes the shape of a normal distribution?

Accepted Answer

Bell-shaped and symmetric

Question 13

A loan of $$ \5$$,000 $ is taken at 7% simple interest for 4 years. What is the total amount to be repaid at the end of the term?

Accepted Answer

$$ \5$$,000 + (5,000 	imes 0.07 	imes 4) = \$$5,000 + \1$$,400 = \$$6,400 $$

Question 14

If a person receives a 10% raise on their salary of $$ \30$$,000 $, what is their new salary?

Accepted Answer

$$ \33$$,000 $

Question 15

Which formula would you use to convert a percentage to a decimal?

Accepted Answer

$$ 	ext{Decimal} = \frac{	ext{Percentage}}{100} $$

Question 16

A normal distribution has $$ \mu = 60 $$ and $$ \sigma = 8 . $$What value corresponds to a z-score of $$ z = -1.5 $$?

Accepted Answer

$$ x = 48 $$

Question 17

A person invests $$ \1$$,500 $$ at 4% annual interest compounded monthly for 3 years. What is the final amount? (Use  n = 12$$ $ and round to the nearest dollar)

Accepted Answer

$$ \1$$,690 $

Question 18

Which of the following statements about the normal distribution is FALSE?

Accepted Answer

It is skewed to the right

Question 19

A person purchases a laptop for $$ \800$$ $ and pays 7% sales tax. What is the total cost?

Accepted Answer

$$ \856$$ $

Question 20

If a person earns $$ \60$$,000 $ and pays 15% in income tax, what is their net income after taxes?

Accepted Answer

$$ \51$$,000 $

Study Notes: The Normal Distribution and Financial Mathematics

Study Guide - Practice Questions

Study Guide - Flashcards