# Financial Math //*

## Unlock all answers in this set

question
Because Bernard has some health issues, he must pay 15% more for life insurance. About how much more annually will a \$115,000 10-year term insurance at age 35 cost Bernard than someone of the same age without health issues?
- D .
question
Peter and Marcia, both age 34, can pay \$650 a year each on life insurance. About how much is the face value of the largest combination of policies they can buy without spending more than a combined \$1,300 annually?
- B .
question
If Jesse wants to buy a \$75,000 10-year term life insurance policy, and the annual premium rate (per \$1000 of face value) for his age group is \$2.34, how much is Jesse's annual premium?
- A .
question
Eva is 29 years old and has 2 children, ages 3 and 5. She makes \$48,500 a year. Eva decides to buy a \$400,000 10-year term policy and then renew the policy for another ten years afterwards. To renew the policy the insurance company charges an extra 40% to her premium rate. Given the options below, assess whether Eva made a wise decision.
- A .
question
Your children are 3 and 5 years old now, and you want an inexpensive policy that covers your family at least until the youngest is 22. Based on the given information, what is the best policy to buy?
- D .
question
When shopping for life insurance, the best strategy is to:
- C .
question
DeShawn is 38 years old and is married with 3 children, ages 2, 4, and 6. He makes \$45,000 a year and is planning to retire when he turns 60. From the following three options, DeShawn decides to buy the \$900,000 20 year term policy. Given DeShawn's scenario, assess whether DeShawn made a wise decision.
- C .
question
When shopping for life insurance, you should look for:
- A .
question
You will pay substantially less for life insurance if which of the following factors is true?
- B .
question
Angelo, age 40, is comparing the premium for a \$125,000 whole life insurance policy he may take now and the premium for the same policy taken out at age 45. Using the table, find the difference in total premium costs over 20 years for this policy at the two age levels.
- C .
question
After getting married, Joe, 32, and Melinda, 29, decide to take out life insurance policies. Joe would like a 15-year term policy and Melinda would like a 20-year term policy. They each want a \$300,000 policy. How much can Joe and Melinda expect to pay in premiums the first year?
- B .
question
If Yessenia wants to buy a \$165,000 whole life policy, and the annual premium rate (per \$1000 of face value) for her age group is \$15.46, how much is Yessenia's monthly premium?
- C .
question
Lamar, age 43, wants to pay no more than \$1,000 a year in life insurance. If the annual life insurance premium rate (per \$1000 of face value) is \$12.59, what is the largest whole life policy he can buy without spending more than \$1,000 annually?
- D .
question
You're 35 years old now, and you want to purchase life insurance which will cover your spouse for your lost income in the event of your death. You want this policy to last until what would be your normal retirement age of 65. Based on the given information, what is the best policy to buy?
- C .
question
Jacob wants to buy a \$500,000 15-year term life policy, and the annual premium rate (per \$1000 of face value) for his age group is \$6.78. If Jacob lives until the end of the term of his policy, how much will Jacob have paid in premiums overall?
- C .
question
Sarah, age 29, makes \$45,000 a year and wants to buy a 15-year term policy that would replace seven years of her salary. The annual premium rate (per \$1000 of face value) for her age group is \$1.46. What is Sarah's premium, to the nearest dollar?
- A .
question
Jeremy is 29 years old and in good health. What is the annual premium for the cheapest policy having a \$90,000 face value that Jeremy can buy?
- D .
question
Because Aaron, age 32, is a smoker, he must pay more for life insurance. Given that Company A charges 20% more for smokers, Company B charges 18% more for smokers, Company C charge 25% more for smokers and Company D charges 15% more for smokers, Aaron decides to buy his \$250,000 policy from Company B. Which of the following statements is true?
- A .
question
The two basic types of life insurance policies are:
- B .
question
Between permanent life insurance and term life insurance, which typically has the lower premium and why?
- A .
question
Maria, age 28, wants to pay no more than \$300 a year in life insurance. What is the face value of the largest 20-year term policy she can buy without spending more than \$300 annually?
- B .
question
Tracy was involved in an accident in which the other driver suffered severe injuries. The police determined that the accident was Tracy's fault. Tracy is fully insured through her insurance company. Which of the following components of Tracy's insurance policy will cover the injuries of the other driver?
- A .
question
Tina was involved in an accident in which she rear-ended another driver stopped at a stoplight. Tina is fully insured through her insurance company. Which of the following components of her insurance policy will cover the damages caused to Tina's car in the accident?
- C .
question
Which of the following is not a reason young drivers have higher auto insurance premiums than older drivers?
- D .
question
Which of the following is not a factor that affects your auto insurance premiums?
- C .
question
In auto insurance, a lower deductible means the customer _____.
- A .
question
Below is the information from a brochure for Fret-No-More Auto Insurance outlining the insurance coverage options they offer. To be considered "full" coverage, an insurance plan must include one level of coverage from each category. What is the annual premium for the full-coverage insurance plan with the highest coverage limits and the lowest deductibles available from Fret-No-More?
- D .
question
What is the basic difference between liability insurance and collision insurance?
- B .
question
In order to lower his monthly auto insurance bill, Henry has decided to change his existing policy by increasing the deductible for both collision and comprehensive insurance to the highest amount permitted by his insurance company, AA Auto Insurance. His current monthly auto insurance bill, which includes a \$250.00 deductible for collision and a \$50.00 deductible for comprehensive, is \$43.79. How will Henry's monthly auto insurance bill be affected by the change?
- A .
question
Susie is thinking about changing her auto insurance policy at Fret-No-More Auto Insurance. Her current policy includes the following options: \$50/100,000 limit for bodily injury, \$25,000 limit for property damage, \$250 deductible for collision, and \$50 deductible for comprehensive. Which of the following changes would increase Susie's limits the most without increasing her monthly premium by more than \$5.00?
- C .
question
After being involved in a car accident last month, Ralph's insurance company has increased his annual premium by \$105.38. Approximately what change will Ralph see on his future monthly statements as a result of the change?
- B .
question
Most U.S. workers and their families receive their health care plan through their employer because _____?
- D .
question
Liam has purchased a fee-for-service health insurance plan from Leroux Health Insurance. Plan A includes a \$248.00 monthly premium and an annual deductible of \$5,500.00 (not including co-pays).
- D .
question
Leroux Health Insurance is considering changing the options in one of their health care plans (Plan A) based on customer feedback that prescriptions and regular visits to the doctor are too expensive for the insured individual. How can Leroux reduce the costs of regular health care without driving up the price of their health care plan?
- C .
question
In a fee-for-service health insurance plan with a \$6,500 annual deductible, _____.
- C .
question
The health benefits Tom receives from his employer cover 43% of the total monthly premium of \$345.00. How much does Tom have to pay each month?
- B .
question
Why are the premiums for a PPO health insurance plan generally more expensive than those for an HMO Health Insurance Plan?
- A .
question
Which of the following statements best describes the difference between a health maintenance organization (HMO) and a preferred provider organization (PPO)?
- C .
question
Jim and Stephanie just got married and are thinking about changing their health care insurance plans to be more affordable. Currently, both Jim and Stephanie are insured through their own employers. Jim's employer pays 42% of his \$378 monthly premium. His insurance plan will also pay for 23% of the \$345 premium for additional beneficiaries. Stephanie's employer pays 35% of her \$298 monthly premium but offers to pay an extra 10% of her premium for each beneficiary Stephanie adds to her plan. Her employer would then pay 30% of the \$349 premium for each additional beneficiary.
- B .
question
Bob's employer covers 23% of his family's annual health insurance premium. The balance of the premium is deducted in equal amounts from Bob's paycheck 26 times over the calendar year. If \$185.30 is withheld from each of Bob's paychecks, what is his family's annual health insurance premium?
- C .
question
Sally's employer pays for 38% of her annual health insurance premium of \$4,350.00. Sally pays the remaining balance by having it deducted in equal amounts from her 26 paychecks throughout the calendar year. How much will Sally have deducted from each paycheck?
- B .
question
Javier's employer pays for 43% of his annual health insurance premium. Javier pays the remaining balance by having it deducted from his paychecks in equal amounts twice a month throughout the year. If \$157.38 is deducted from each of Javier's paychecks, what is his total annual premium?
- C .
question
Which of the following health care programs will wait to pay their share of medical coverage until after treatment is provided?
- A .
question
In order to make premiums more affordable for their customers, Leroux Health Insurance is considering some changes to one of the plans they offer. Both the current options and proposed changes are outlined in the charts below.
- A .
question
As a part-time employee, Rachel does not qualify for any benefits from her current employer. Seeing a need for a health care program, Rachel went shopping for health insurance and is trying to decide between two options with a national health insurance provider. The benefits of each option are outlined in the tables below.
- C .
question
In addition to general medical services, Holly would like to add dental and vision options to her health care plan. The monthly premium for her medical insurance is \$345 of which her employer pays 65%. Her employer also offers to pay 50% of the monthly dental premium of \$38 and 75% of the \$23 monthly premium for the vision plan that is offered. If Holly opts for both the dental and vision options in addition to her regular health insurance, what will her total monthly premium be?
- A .
question
The health care Jimmy's employer offers is a fee-for-service plan in which Jimmy and his family must pay for \$12,500 in health related services in a calendar year before the insurance company begins to pay. Jimmy and his family have several health related issues that demand \$685.00 each month. If one of Jimmy's children were to become seriously injured at the end of the year, how much would the related health costs need to be in order for the insurance company to assume responsibility?
- B .
question
Billy's employer pays for 65% if his annual health insurance premium. Billy has the rest deducted in equal amounts from his paycheck. If Billy has \$105.73 withheld from his paychecks twice each month, how much does his employer contribute towards his health insurance on an annual basis?
- D .
question
Patrick and Susie just welcomed a set of twins to their family and have to decide how to purchase health insurance for the babies. Patrick's employer pays for 100% of his monthly health insurance premium of \$378, but will not pay for any of the \$280 for each additional beneficiary. Susie's employer, who pays 63% of her \$403 monthly premium, offers to pay 32% of the \$310 monthly premium for each additional beneficiary. Which would be the most economical way to purchase health insurance for the family?
- C .
question
Health insurance helps to protect you from financial loss by _____.
- A .
question
Andrew is insured by Leroux Health Insurance under Plan A. The plan includes a \$248.00 monthly premium with a \$5,500.00 annual deductible (not including co-pays).
- D .
question
Most U.S. workers and their families receive their health care plan through their employer because _____?
- D .
question
Liam has purchased a fee-for-service health insurance plan from Leroux Health Insurance. Plan A includes a \$248.00 monthly premium and an annual deductible of \$5,500.00 (not including co-pays).
- D .
question
Leroux Health Insurance is considering changing the options in one of their health care plans (Plan A) based on customer feedback that prescriptions and regular visits to the doctor are too expensive for the insured individual. How can Leroux reduce the costs of regular health care without driving up the price of their health care plan?
- C .
question
In a fee-for-service health insurance plan with a \$6,500 annual deductible, _____.
- C .
question
The health benefits Tom receives from his employer cover 43% of the total monthly premium of \$345.00. How much does Tom have to pay each month?
- B .
question
Jim and Stephanie just got married and are thinking about changing their health care insurance plans to be more affordable. Currently, both Jim and Stephanie are insured through their own employers. Jim's employer pays 42% of his \$378 monthly premium. His insurance plan will also pay for 23% of the \$345 premium for additional beneficiaries. Stephanie's employer pays 35% of her \$298 monthly premium but offers to pay an extra 10% of her premium for each beneficiary Stephanie adds to her plan. Her employer would then pay 30% of the \$349 premium for each additional beneficiary.
- B .
question
Bob's employer covers 23% of his family's annual health insurance premium. The balance of the premium is deducted in equal amounts from Bob's paycheck 26 times over the calendar year. If \$185.30 is withheld from each of Bob's paychecks, what is his family's annual health insurance premium?
- C .
question
Sally's employer pays for 38% of her annual health insurance premium of \$4,350.00. Sally pays the remaining balance by having it deducted in equal amounts from her 26 paychecks throughout the calendar year. How much will Sally have deducted from each paycheck?
- B .
question
Gerald would like to add a dental and vision option to the health insurance plan he purchased through his employer. In addition to the 65% of Gerald's \$345 monthly health insurance premium, his employer has offered to pay 50% of a \$38 monthly dental premium and 75% of a \$23 monthly vision premium. If Gerald adds both the dental and vision options to his insurance plan, how much will he pay each month towards health insurance?
- B .
question
Sammy is a full-time students who does not work. He is too old to stay on his parents health insurance and is looking for his own health care program. The two options he is considering are outlined in the tables below.
- C .
question
Mr. Henderson's annual premium of \$4,668 is covered entirely by his employer along with 25% of the \$9,264 premium for his wife and kids. How much of the Henderson family's annual premium is being paid for by Mr. Henderson's employer?
C .
question
Which of the following is not a way health insurance helps to save you money?
- D .
question
Which of the following will not help Robert lower his homeowners insurance premium?
- D .
question
Which of the following is something that will not affect your homeowners insurance premium?
- A .
question
Ben just purchased a house in an older neighborhood. After talking to several neighbors across the street, he found that he is paying much more in homeowners insurance than other homeowners in the neighborhood.
- A .
question
Renters insurance is different than homeowners insurance in that _____.
- B .
question
Rudy has been paying an annual homeowners insurance premium of \$1,106.30 (\$0.37 per \$100 of value) since he first purchased his house. For the past six months, Rudy has completed some major improvements to his house to improve its overall value. If Rudy successfully adds \$50,000 to the value of his house, what will his new annual homeowners insurance premium be?
- C .
question
Tara and Levi are trying to decide between homeowners insurance policies offered by two different agencies.
- C .
question
In many cases, lenders allow homeowners to included their homeowners insurance premium with their monthly mortgage payment. Tim's home is worth \$279,500. If his homeowners insurance premium is \$0.33 per \$100, how much is added to his monthly mortgage payment for insurance?
- B .
question
Which of the following is a cost homeowners insurance does not protect?
- C .
question
Rachel just purchased a homeowners insurance policy for her new home that costs \$0.43 per \$100. Her home is worth \$387,500. What is Rachel's annual homeowners insurance premium?
- A .
question
Cesar's annual homeowners insurance premium is \$972.80. If his home is valued at \$253,000, roughly how much is Cesar paying for homeowners insurance?
- D .
question
Greg just purchased a house for \$450,000. His annual homeowners insurance premium is \$0.42 per \$100 of value. If his annual premium is divided into equal monthly payments, what will Greg have to pay on a monthly basis to keep his home insured?
- B .
question
Determine what Paul will have to pay on an annual bases for his \$449,000 home if his insurance company is charging him \$0.41 per \$100 of value in his home.
- C .
question
Cindy's apartment complex is offering renters insurance through their insurance company. The insurance company charges an annual premium of \$565.00 which can be paid in equal payments throughout the year with her monthly rent. Cindy's monthly rent is currently \$789.00. What will Cindy's new rent be if she includes the renters insurance?
- C .
question
Kurtis had purchased a renters insurance policy for his new apartment at an annual premium of \$588.00. The items covered in the policy included a bicycle kept locked to the railing in front of the apartment. When the bicycle was stolen, the insurance company covered the replacement cost of the bicycle, but told Kurtis that, because of the loss, his premium would increase by 35% if he wished to continue with the policy. What would Kurtis' new annual premium be if he chose to keep the policy.
- D .
question
Stephanie would like to lower her premium by increasing her deductible. If Stephanie wants to increase her deductible to \$1000, what annual premium would result in an annual out-of-pocket expense that is about the same as her current plan?
- B .
question
Jennifer purchased a house in a brand new development in the outskirts of town. When her house was built, the nearest fire department was nearly 20 miles away. As her neighborhood developed, the density of the community called for a new fire department 1.5 miles away. What effect will the new fire station have on her homeowners insurance premium?
- C .
question
Ralph wants to purchase a renters insurance policy for his new apartment. His insurance company charges an annual premium of 16.53% of the approximate value of the items he owns and is keeping in his apartment. Below is a list of items Ralph made of the items he has in his apartment that he would like to be insured with his policy. What will Ralph's annual renters insurance premium be?
- D .
question
Sarah pays \$48.00 each month to keep her house insured. If her house is valued at \$223,050, about how much is Sarah paying per \$100 in homeowners insurance annually?
- B .
question
Sam knows that his annual homeowners insurance premium is \$0.27 per \$100 of value, which usually works out to be \$683.10 annually. But Sam is confused by a letter from his insurance company telling him that an increase in the value of his home has led to an increase in his annual homeowners insurance premium. He is now being charged an annual premium of \$720.90. Based on the increase in his annual homeowners insurance premium, what was the increase in his home's value? (Note: The cost is still \$0.27 per \$100, even though the annual premium went up.)
- C .
question
Which of the following is something that will not affect your homeowners insurance premium?
- C .
question
Susan is paying \$0.30 per \$100 on her \$483,000 home in homeowners insurance annually. If her annual homeowners insurance premium is divided into twelve equal monthly installments to be included on each of her monthly mortgage payments of \$2128.00, what is her total monthly payment?
- A .
question
Sally just purchased a beautiful home on a riverbank for what she thought was a very good deal. She later learned that her house was very susceptible to flood damage during the rainy season. Which of the following statements best describes the effect the location of Sally's new home will have on her homeowners insurance premium?
- A .
question
Allie and Sarah decided that they want to purchase renters insurance for the apartment they share. They made a list of all of the items to be covered by the insurance policy, along with their estimated values. If the items to be covered total more than \$3000, the insurance company charges an annual premium of 23% of the total value of the items. If the items to be covered total \$3000 or less, the insurance company charges an annual premium of 20% of the total value of the items.
- B .
question
Zach is looking for a homeowners insurance policy for his new house. AAA Insurance company has offered him a plan that insures his home annually for \$0.36 per \$100 of value in the home. In order to make calculations easier, Thompson's Insurance lists their annual homeowners insurance premium a bit differently, at \$3.63 per \$1,000 of value in the home.
- B .
question
What is the difference between a full warranty and a limited warranty?
- D .
question
An electric guitar costs \$830, with a \$225 full-replacement warranty. If the manufacturer sells 532,475 warranties and has to honor 12% of them, how much profit did the manufacturer gain from the warranties?
- B .
question
A toaster oven costing \$130 offers an extended warranty for 25% of the purchase price. If the local repair shop will fix a toaster oven for \$8, how many times must the toaster oven break in order for the warranty to pay for itself?
- A .
question
Of the following, which factor or factors would make it more likely that buying an extended warranty is a good idea? I. The extended warranty overlaps with the manufacturer's warranty. II. The product has a high probability of needing repair in the next few years. III. The product is a major purchase that you are unlikely to soon replace.
- C .
question
The extended warranty on a \$960 dishwasher is 21% of the purchase price and lasts for eight years. What is the effective cost per year of the extended warranty?
- D .
question
What does it mean for a manufacturer's warranty and an extended warranty to overlap?
- B .
question
The extended warranty on a ceiling fan is 18% of the purchase price. If the price of the fan is \$140, how much is the warranty?
- B .
question
A combination washer/dryer costs \$1,179. New parts for this washer/dryer cost \$211, labor to repair it costs \$553, and shipping it to and from a repair center costs \$152. A full warranty, which covers all aspects of repairing the washer/dryer, costs 30% of the price of the washer/dryer. A limited warranty, which only covers labor costs, only costs 14% of the price of the washer/dryer. Assuming that the washer/dryer needs repairs which include parts, labor, and shipping, which warranty is the better deal, and by how much, rounded to the nearest dollar?
- D .
question
The extended warranty on a garage door is \$238. If the warranty costs 35% of the purchase price, how much does the garage door itself cost, to the nearest dollar?
- D .
question
Say you are buying a bicycle. You do not plan to use the bicycle for more than a few years before buying a new one, but will rely on it in the meantime. You know that your bicicyles tend to need repairs periodically, but you tend to take good care of them overall. The bicycle is relatively cheap, so you do not want to invest too much money into it. What kind of warranty would be a good one to purchase and why?
- B .
question
A space heater costing \$235 offers an extended warranty for 15% of the purchase price. If the local repair shop will fix a space heater for \$12, how many times must the space heater need repairs for the warranty to be worth the cost?
- C .
question
The extended warranty on a mini-fridge costs \$41.25. If the warranty is 12.5% of the normal price, what is the cost of the mini-fridge itself, to the nearest dollar?
- C .
question
A set of floor speakers costs \$466. If the extended warranty on the speakers costs 32% of the price of the speakers, how much does the extended warranty cost?
- A .
question
A complete desktop computer costs \$965. A replacement monitor costs \$238, a replacement hard drive costs \$260, a replacement outer case costs \$145, labor to repair it costs \$77, and shipping it to and from a repair center costs \$41. A full warranty, which covers the entire cost of repairing the computer, is 35% of the purchase price. A limited warranty, which only covers internal parts and labor, costs 11% of the purchase price. If the computer tower is damaged, requiring a new hard drive, new case, labor, and shipping, which warranty will be the better deal, and by how much?
- B .
question
A vacuum cleaner costs \$68, and the full-replacement extended warranty costs \$22. If the manufacturer sells 360,920 vacuum cleaners under warranty and must replace 15% of them to honor the warranties, how much will the replacement costs be?
- B .
question
A lawnmower costs \$284, and the six-year extended warranty on the lawnmower costs 17% as much as the lawnmower itself. What is the effective price per year of the extended warranty?
- C .
question
A new cell phone has a purchase price of \$225. With the extended warranty, the total cost comes to \$289. What percent of the purchase price is the price of the warranty?
- A .
question
A microwave costs \$89, with a \$17 full-replacement warranty. If the manufacturer sells 475,360 warranties and has to honor 7.5% of them, how much profit did the manufacturer make from the warranties?