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Any money you earn or have coming in is called____________
A.
Expense
B.
Income
C.
Budget
D.
Interest
Correct Answer
B. Income
Explanation Income refers to any money that a person earns or has coming in. It includes wages, salaries, tips, commissions, bonuses, rental income, and any other form of payment received for providing goods or services. Income is an essential component of personal finance and is used to cover expenses, save for the future, and invest. It is different from expenses, which are the costs incurred in order to maintain a certain standard of living or to generate income. Budget refers to a plan for managing income and expenses, while interest is the amount paid for borrowing money or earned on investments.
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2.
What is any money taken out of your account or paid out called?
A.
Income
B.
Expense
C.
Budget
D.
Interest
Correct Answer
B. Expense
Explanation An expense refers to any money that is taken out of your account or paid out. This can include various payments such as bills, purchases, or any other financial obligations that reduce the balance of your account. Expenses are considered as a negative impact on your financial situation as they decrease the amount of money available to you.
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3.
A plan for keeping track of your income and expenses is called a _____________.
A.
Interest
B.
Expense
C.
Income
D.
Budget
Correct Answer
D. Budget
Explanation A budget is a plan that helps individuals or organizations keep track of their income and expenses. It allows them to allocate their resources effectively and make informed financial decisions. By creating a budget, one can set financial goals, monitor spending patterns, and ensure that income is sufficient to cover expenses. It helps in managing finances, saving money, and avoiding unnecessary debt.
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4.
Explain the difference between fixed and variable expenses.
A.
The amount of a fixed expense changes and variable stays the same each time
B.
The amount of a fixed expense is always higher than a variable expense
C.
The amount of a fixed expense stays the same and variable expenses change each time
D.
There is no difference; they are both expenses listed on a budget
Correct Answer
C. The amount of a fixed expense stays the same and variable expenses change each time
Explanation Fixed expenses refer to costs that remain constant or do not fluctuate regardless of the level of production or sales. These expenses have a set amount that remains the same over a given period, such as rent or loan payments. On the other hand, variable expenses are costs that change in relation to the level of production or sales. These expenses vary depending on factors such as production volume, sales revenue, or usage, such as raw materials or utilities. The given answer correctly explains the difference by stating that fixed expenses stay the same, while variable expenses change each time.
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5.
The amount you earn at your job each pay period is the EXACT same as the amount of pay listed on your paycheck.
A.
True
B.
False
Correct Answer
B. False
Explanation The statement is false because the amount you earn at your job each pay period may not be the exact same as the amount of pay listed on your paycheck. Your paycheck may have deductions such as taxes, insurance premiums, or retirement contributions, which would result in a lower net pay than your gross earnings.
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6.
Which ones are examples of items deducted from your paycheck?
A.
State income tax
B.
Federal income tax
C.
FICA or social security
D.
All of these
Correct Answer
D. All of these
Explanation All of these options are examples of items that can be deducted from a paycheck. State income tax, federal income tax, and FICA or social security are all common deductions that are taken out of an individual's paycheck. State income tax is the tax imposed by the state government on an individual's income, while federal income tax is the tax imposed by the federal government. FICA or social security refers to the taxes that fund the Social Security and Medicare programs. Therefore, all of these options are valid examples of paycheck deductions.
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7.
Calculate Jon's gross pay for the week if he worked 35 hours and makes $12.85 per hour?
(REMEMBER THIS AMOUNT FOR THE NEXT QUESTIONS!!)
A.
$47.85
B.
$2.72
C.
$4497.50
D.
$449.75
Correct Answer
D. $449.75
Explanation Jon's gross pay for the week can be calculated by multiplying the number of hours he worked (35) by his hourly rate ($12.85). Therefore, 35 * $12.85 = $449.75.
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8.
Remember, Jon worked 35 hours @ $12.85 per hour. He pays 15% in federal taxes. How much is deducted from his paycheck?
A.
$382.29
B.
$67.46
C.
$13.49
D.
$6746.25
Correct Answer
B. $67.46
Explanation Jon's total earnings can be calculated by multiplying his hourly rate ($12.85) by the number of hours he worked (35), which equals $449.75. To find the amount deducted from his paycheck, we need to calculate 15% of his earnings. 15% of $449.75 is $67.46. Therefore, $67.46 is deducted from Jon's paycheck.
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9.
Remember, Jon worked 35 hours at $12.85 per hour. He pays 3% in state taxes. How much is deducted from his paycheck?
A.
$382.29
B.
$67.46
C.
$13.49
D.
$436.26
Correct Answer
C. $13.49
Explanation Jon worked 35 hours at $12.85 per hour, which amounts to a total of $449.75. To calculate the amount deducted from his paycheck, we need to find 3% of $449.75. Multiplying $449.75 by 0.03 gives us $13.49. Therefore, $13.49 is deducted from Jon's paycheck.
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10.
Ashley got a job as an accountant. She earns $89,000 a year and is paid monthly. What is her gross pay each paycheck? Please round to the nearest even dollar!
A.
$7416.00
B.
$7417.00
C.
$10680.00
D.
$8898.00
Correct Answer
B. $7417.00
11.
Tony got a job as an accountant. He earns $6855.00 each monthly paycheck. His total deductions are 23% of his pay. What is the net amount of his paycheck?
A.
$1576.65
B.
$5278.35
C.
$6855.00
D.
$157.66
Correct Answer
B. $5278.35
Explanation Tony earns $6855.00 each month, but his total deductions are 23% of his pay. To find the net amount of his paycheck, we need to subtract his deductions from his earnings.
23% of $6855.00 is $1576.65.
Subtracting $1576.65 from $6855.00 gives us $5278.35.
Therefore, the net amount of Tony's paycheck is $5278.35.
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12.
Nina's net pay each paycheck is $1238.00. She should try to put 10% each pay check into an account for savings or an emergency. How much should she save? Round to the nearest dollar!
A.
$123.00
B.
$124.00
C.
$12.00
D.
$123.40
Correct Answer
B. $124.00
Explanation Nina's net pay each paycheck is $1238.00. To calculate 10% of her net pay, we can multiply $1238.00 by 0.10. This gives us $123.80, which rounds to the nearest dollar as $124.00. Therefore, Nina should save $124.00 from each paycheck.
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13.
Alex puts $78.00 from each paycheck into his savings. He gets paid twice a month. How much does Alex have in his savings at the end of the year?
A.
$936.00
B.
$1872.00
C.
$78.00
D.
$541.00
Correct Answer
B. $1872.00
Explanation Alex puts $78.00 from each paycheck into his savings. Since he gets paid twice a month, he saves $78.00 x 2 = $156.00 per month. In a year, he saves $156.00 x 12 = $1872.00. Therefore, Alex has $1872.00 in his savings at the end of the year.
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14.
The formula for calculating simple interest is Interest = P * R * T.
What does the "P" stand for?
A.
Principal; the amount of money you have in the account
B.
Rate; the interest percentage amount
C.
Time; how long the money has been in the account
Correct Answer
A. Principal; the amount of money you have in the account
Explanation The letter "P" in the formula for calculating simple interest stands for Principal, which refers to the initial amount of money that is invested or borrowed. It represents the amount of money that is either deposited into an account or loaned out. In the context of the formula, the principal is multiplied by the interest rate and the time period to calculate the interest amount. Therefore, "P" represents the amount of money that one has in the account.
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15.
The formula for calculating simple interest is Interest = P * R * T.
What does the "R" stand for?
A.
Principal; the amount of money in the account
B.
Rate; the percentage of interest
C.
Time; how long the money has been in the account
Correct Answer
B. Rate; the percentage of interest
Explanation The "R" in the formula stands for rate, which represents the percentage of interest. It is used to calculate the amount of interest earned or paid on a principal amount over a specific period of time.
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16.
The formula for calculating simple interest is Interest = P * R * T.
What does the "T" stand for?
A.
Principal; the amount of money in the account
B.
Rate; the interest percentage
C.
Time; how long the money has been in the account
Correct Answer
C. Time; how long the money has been in the account
Explanation The "T" in the formula stands for time, which refers to how long the money has been in the account. This means that the interest earned will depend on the duration for which the money has been invested or borrowed.
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17.
Mark each true statement about interest.
A.
It is the cost of using money
B.
It can be good or bad
C.
The higher the percentage the more money in interest
D.
It is ALWAYS better to have a low percentage of interest
E.
You want savings accounts with compound interest
Correct Answer(s)
A. It is the cost of using money B. It can be good or bad C. The higher the percentage the more money in interest E. You want savings accounts with compound interest
Explanation Interest is the cost of using money, as it represents the amount that is charged for borrowing or the amount earned on an investment. It can be good or bad depending on whether you are paying or receiving it. The higher the percentage of interest, the more money you will earn or owe. It is generally better to have a low percentage of interest, as it means that you will pay less or earn less on your money. Savings accounts with compound interest are desirable because they allow your money to grow faster over time.
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18.
Mark all the correct statements about simple and compound interest:
A.
Simple interest is added to the starting principal only
B.
Compound interest is added to the starting principal and any other earned interest
C.
Simple interest is better; you make more money
D.
Compound interest is better; you make more money
E.
The more often interest is compounded, the more money you make
Correct Answer(s)
A. Simple interest is added to the starting principal only B. Compound interest is added to the starting principal and any other earned interest D. Compound interest is better; you make more money E. The more often interest is compounded, the more money you make
Explanation Simple interest is added to the starting principal only, while compound interest is added to the starting principal and any other earned interest. Compound interest is considered better because it allows for the growth of interest over time, resulting in more money being made. Additionally, the more often interest is compounded, the more money is made, as it allows for more frequent accumulation of interest on the principal and previous interest earnings.
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19.
Matthew James has $148.00 in his account for 6 years earning 5.5% interest. How much interest does he earn?
A.
$4884.00
B.
$48.84
C.
$196.84
D.
$5.50
Correct Answer
B. $48.84
Explanation To calculate the interest earned, we can use the formula: Interest = Principal * Rate * Time. In this case, the principal amount is $148.00, the rate is 5.5% (or 0.055 as a decimal), and the time is 6 years. Plugging these values into the formula, we get: Interest = $148.00 * 0.055 * 6 = $48.84. Therefore, Matthew James earns $48.84 in interest.
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20.
Matthew James has $148.00 in his account earning 5.5% simple interest. How much money does he have in his account at the end of the 6 years?
A.
$4884.00
B.
$48.84
C.
$196.84
D.
$5.50
Correct Answer
C. $196.84
Explanation Matthew James has $148.00 in his account earning 5.5% simple interest. At the end of each year, he will earn 5.5% of his initial amount. After 6 years, he will have earned 6 times the interest on his initial amount. Therefore, the amount of interest he will earn is $148.00 * 0.055 * 6 = $48.84. Adding this interest to his initial amount, Matthew James will have $148.00 + $48.84 = $196.84 in his account at the end of 6 years.
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21.
Mark all the correct statements.
A.
Discounts and sales tax are often calculated as a percent of the purchase price
B.
Sales tax and discounts are both added on to the price
C.
Sales tax and discounts are both subtracted from the price
D.
Discounts are subtracted and sales tax is added on to the price
E.
Discounts are added and sales tax is subtracted from the price
F.
Discounts are subtracted from the price and then sales tax is added on
Correct Answer(s)
A. Discounts and sales tax are often calculated as a percent of the purchase price D. Discounts are subtracted and sales tax is added on to the price F. Discounts are subtracted from the price and then sales tax is added on
Explanation Discounts and sales tax are often calculated as a percent of the purchase price. Discounts are subtracted from the price and then sales tax is added on. This means that the initial purchase price is reduced by the discount amount, and then the sales tax is calculated and added on to the discounted price.
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22.
A laptop sells for $640.00. Sales tax in Glenview is 9.75%. How much is the sales tax?
A.
$9.75
B.
$64.00
C.
$63.00
D.
$62.40
Correct Answer
D. $62.40
Explanation The sales tax is calculated by multiplying the price of the laptop by the sales tax rate. In this case, the sales tax rate is 9.75%. So, to find the sales tax, we multiply $640.00 by 9.75%. This gives us $62.40, which is the correct answer.
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23.
A laptop sells for $640.00 but is on sale for 25% off? What is the new cost of the laptop?
A.
$160.00
B.
$480.00
C.
$62.40
D.
$800.00
Correct Answer
B. $480.00
Explanation The laptop is on sale for 25% off, which means the customer will pay only 75% of the original price. To calculate the new cost, we multiply the original price ($640.00) by 75% (0.75). This gives us $480.00, which is the new cost of the laptop after the discount.
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24.
A laptop sells for $640.00 but is on sale for 25% off? There is 9.75% sales tax. How much will I pay for the laptop?
A.
$526.80
B.
$800.00
C.
$878.00
D.
$702.40
Correct Answer
A. $526.80
Explanation The original price of the laptop is $640.00. It is on sale for 25% off, so the discounted price would be 75% of the original price. Therefore, the discounted price is $640.00 * 0.75 = $480.00.
Next, we need to calculate the sales tax. The sales tax is 9.75% of the discounted price. Therefore, the sales tax is $480.00 * 0.0975 = $46.80.
Finally, we need to add the discounted price and the sales tax to find the total amount to be paid. The total amount to be paid is $480.00 + $46.80 = $526.80.
Therefore, the correct answer is $526.80.
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25.
Chris wants a different phone case for everyday of the week. The cost of one case is $12.95. What is the cost (before taxes) for all of the phone cases?
A.
$64.75
B.
$90.65
C.
$12.95
D.
$98.83
Correct Answer
B. $90.65
Explanation Chris wants a different phone case for every day of the week, which means he needs 7 phone cases in total. The cost of one phone case is $12.95. To find the cost for all of the phone cases, we can multiply the cost of one case by the number of cases needed: $12.95 x 7 = $90.65. Therefore, the cost (before taxes) for all of the phone cases is $90.65.
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26.
Alex buys a value pack of seven phone cases for $73.43. What is the unit cost for one phone case?
A.
$73.43
B.
$64.75
C.
$12.95
D.
$10.49
Correct Answer
D. $10.49
Explanation The unit cost for one phone case can be calculated by dividing the total cost of the value pack by the number of phone cases in the pack. In this case, the total cost is $73.43 and there are seven phone cases in the pack. Therefore, the unit cost for one phone case is $10.49.
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27.
DVD's of my favorite movies are on sale. What is the better buy?
3 DVD's for $32.97 or 4 DVD's for $43.56
A.
4 DVD's for $43.56
B.
3 DVD's for $32.97
C.
Neither - the cost is the same
Correct Answer
A. 4 DVD's for $43.56
Explanation The better buy is 4 DVD's for $43.56 because it offers more DVDs for a slightly higher price compared to 3 DVD's for $32.97. This means that each DVD in the 4 DVD bundle is cheaper than the individual DVDs in the 3 DVD bundle. Therefore, you get more value for your money by purchasing the 4 DVD bundle.
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28.
What is the better buy?
6 packs of gum for $10.74 or 12 packs of gum for $21.48
A.
12 packs for $21.48
B.
6 packs for $10.74
C.
Neither, they are the same price
Correct Answer
C. Neither, they are the same price
Explanation The correct answer is "Neither, they are the same price." This is because if we divide the total cost by the number of packs, we get the price per pack. In both cases, the price per pack is $1.79. Therefore, both options are the same price.
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29.
How much is 10% of $45.00? Do NOT use a calculator and please write as a money amount.
Correct Answer $4.50
Explanation To find 10% of $45.00, you can divide $45.00 by 10. This gives you $4.50, which represents 10% of $45.00.
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30.
If 10% of $30.00 is $3.00. What is 20% of $30.00? Try this without a calculator!
Correct Answer $6.00
Explanation If 10% of $30.00 is $3.00, it means that for every 10% increase, the value increases by $3.00. Therefore, if we want to find 20% of $30.00, we can simply double the value of $3.00, which gives us $6.00.
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31.
When you eat out at a restaurant, and the service is good, what is the standard percentage of the food amount should you leave as a tip?
A.
10%
B.
10- 12%
C.
15 - 18%
D.
Over 20%
Correct Answer
C. 15 - 18%
Explanation A standard percentage of 15-18% is generally considered an appropriate amount to leave as a tip when the service at a restaurant is good. This range allows for a reasonable acknowledgment of the quality of service provided by the staff, while also taking into account any additional factors such as the overall cost of the meal. Leaving a tip within this range is considered fair and customary in many dining establishments.
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32.
If the service at a restaurant is not so good, you can leave a smaller tip. If the service is great, you can leave a bit more. This is better than not leaving a tip.
A.
True
B.
False
Correct Answer
A. True
Explanation Leaving a smaller tip if the service at a restaurant is not so good and leaving a bit more if the service is great is considered better than not leaving a tip at all. This is because tipping is a customary practice in many cultures and not leaving a tip can be seen as rude or disrespectful. By adjusting the tip amount based on the quality of service, it allows the customer to express their satisfaction or dissatisfaction while still adhering to social norms.
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33.
You have lunch at the Downtown Diner and the total food bill come to $18.89. What would a fair tip be given the service was good?
A.
$1.80
B.
$2.00
C.
$2.50
D.
$3.00
Correct Answer
D. $3.00
Explanation A fair tip for good service at the Downtown Diner would be $3.00. This is because it is customary to tip around 15-20% of the total bill, and $3.00 is approximately 15% of $18.89.
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34.
You eat at Riskey's BBQ. The food bill comes to $25.64. The tax amount is $4.15. What would a fair tip be if the service is fine?
A.
$2.20
B.
$3.10
C.
$4.00
D.
$5.00
Correct Answer
C. $4.00
Explanation A fair tip would be $4.00. This is because a standard tip amount is usually around 15-20% of the total bill. In this case, the total bill is $25.64, and a 15% tip would be $3.846. Rounding it up to the nearest dollar, a fair tip would be $4.00.
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35.
You are out to dinner with four other friends at Pedro's Pizza. You ordered three pizza's and pitchers of Coke. The total food bill came to $114.65. How much tip should you leave and how much should each person pay?
A.
$11.00 tip and about $23.00 each
B.
$11.00 tip and about $31.00 each
C.
$20.00 tip and about $27.00 each
D.
$25.00 tip and about $35.00 each
Correct Answer
C. $20.00 tip and about $27.00 each
Explanation The total food bill came to $114.65. To calculate the tip, we can use the rule of thumb of 15-20% of the total bill. If we choose a 15% tip, it would be $17.20, which is not an option. If we choose a 20% tip, it would be $22.93, which is closest to the given answer of $20.00. To calculate how much each person should pay, we divide the total bill ($114.65) plus the tip ($20.00) by the number of people (5), resulting in approximately $27.00 each.
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36.
You and a friend are out to dinner. You ordered a sandwich, fries and a coke for a total of $13.87. Your friend ordered a deluxe burger, fries and coke and a dessert for a total of $21.47. How much should you pay - including your tip?
A.
$14.87
B.
$16.00
C.
$20.00
D.
$22.47
Correct Answer
B. $16.00
Explanation Based on the information given, the total cost of your friend's meal is $21.47. Since you both ordered the same items except for the dessert, which is not mentioned in your order, we can assume that the dessert costs $0. Therefore, the cost of your meal would be $21.47 - $0 = $21.47. As you are splitting the bill evenly, you should pay half of the total cost, which is $21.47 / 2 = $10.74. Adding a tip to this amount, the final amount you should pay would be $10.74 + $5.26 (tip) = $16.00.
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37.
What is 25% of $425.00? Written as a money amount!!
Correct Answer $106.25
Explanation To find 25% of $425.00, we can multiply $425.00 by 0.25. This is because 25% is equivalent to 0.25 as a decimal. When we calculate 0.25 multiplied by $425.00, we get $106.25. Therefore, $106.25 is 25% of $425.00.
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38.
Write 8% as a decimal.
Correct Answer .08
Explanation To write a percentage as a decimal, we divide it by 100. In this case, 8% divided by 100 equals 0.08. Therefore, the correct decimal representation of 8% is 0.08.
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39.
There are 12 months in a year and you get a paycheck twice a month. How many pay checks to you receive in 1 year?
Correct Answer 24
Explanation Since you receive a paycheck twice a month, you will receive a total of 24 paychecks in a year. This is because there are 12 months in a year, and if you receive a paycheck twice a month, it means you will receive 2 paychecks every month. Multiplying 2 by 12 gives you a total of 24 paychecks in a year.
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40.
Check all examples of fixed expenses:
A.
Rent
B.
Groceries
C.
Mortgage
D.
Entertainment; going out
E.
Car payment
F.
Student loan
Correct Answer(s)
A. Rent C. Mortgage E. Car payment F. Student loan
Explanation The correct answer includes rent, mortgage, car payment, and student loan. These are considered fixed expenses because they are recurring payments that do not typically fluctuate in amount from month to month. Rent and mortgage are regular payments for housing, while car payment and student loan are regular payments for transportation and education, respectively. Groceries and entertainment expenses can vary from month to month, so they are not considered fixed expenses.
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