MATH1050 SP 23 Exam 2 V1

MATH 1050 - Quantitative reasoning Spring 23 Exam 2 March 21, 2023 Name Student ID Instructor Class time INSTRUCTIONS 1. Do not open this exam until you are told to do so. 2. Do not ask questions during the exam. 3. Carefully mark your student ID number on your scantron. 4. This exam has 7 pages, including the cover sheet. There are 16 multiple-choice questions, each worth 5 points, and 2 workout questions, worth a total of 20 points. No partial credit will be given on the multiple choice questions. 5. All multiple choice answers must be carefully marked in the scantron using a pencil. 6. You will have 60 minutes to complete the exam. Only a TI-30XS calculator is allowed. 7. When you are finished, check your work carefully. Then return the exam to YOUR instructor. USEFUL INFORMATION A = P + ( P · APR · y ) A = P (1 + APR ) y A = P 1 + APR n n · y Price in $ y = (Price in $ x ) · CPI y CPI x Total return = A - P P · 100% Annual return = " A P 1 /Y - 1 # · 100% PMT = P · APR n " 1 - 1 + APR n ( - n · Y ) # A = PMT · " 1 + APR n ( n · Y ) - 1 # APR n PMT = A · APR n " 1 + APR n ( n · Y ) - 1 # Absolute change = New value - Reference value Relative change = New value - Reference value Reference value · 100% Absolute difference = Compared value - Reference value Relative difference = Compared value - Reference value Reference value · 100% Reference value = Compared value (100 + P )% Absolute error = Measured value - True value Relative error = Measured value - True value True value · 100% Index number = Value Reference value · 100

MULTIPLE CHOICE. Mark your answers here and on the scantron. Partial credit will not be given. 1. In order to answer the question, which of the following types of study would be the most appropriate? How do lawyers’ salaries compare to doctors’ salaries? (a) Experiment without blinding (b) Experiment with single blinding (c) Observational Study (d) Case-control Study 2. Suppose you are 25 years old and would like to retire at age 65, having accumulated a retirement fund from which you could draw $150 , 000 per year - forever! How much would you need to deposit each month to do this? Assume a constant APR of 5%. (a) $98 . 29 (b) $1965 . 90 (c) $14 , 465 . 90 (d) $723 . 29 3. Suppose that you have an insurance policy with a monthly premium of $800 and an annual deductible of $1500. Your only medical bill for the year cost $1000. What were your total health-care expenses for the year? (a) $9 , 600 (b) $10 , 600 (c) $11 , 100 (d) $12 , 100 4. Decide whether a person should itemize his deductions or take the standard deduction in the following case. Matthew’s deductible expenditures are $5000 for interest on a home mortgage, $2400 for contributions to charity, and $631 for state income taxes. His filing status entitles him to a standard deduction of $6 , 700. (a) He should claim the standard deduction as it would deduct more money from his taxable income. (b) He should itemize his deductions as it would deduct less money from his taxable income. (c) He should itemize his deductions as it would deduct more money from his taxable income. (d) He should claim the standard deduction as it would deduct less money from his taxable income.

8. Determine what type of correlation the graph displays. (a) No correlation at all (b) Scattered correlation (c) Negative correlation (d) Positive correlation 9. You have a choice between going to an in-state college where you would pay $5000 per year for tuition and an out-of-state college where the tuition is $8000 per year. You will pay $750 per month in rent at the in-state college, compared to $500 per month at the other college. Assuming all other factors are equal, which is the less expensive choice on an annual basis? (a) The out-of-state college is $6000 cheaper per year. (b) The in-state college is $6000 cheaper per year. (c) The in-state college is $600 cheaper per year. (d) They cost the same on an annual basis 10. Suppose that on January 1 you have a balance of $4700 on a credit card whose APR is 21%, which you want to pay off in 1 year. Assume that you make no additional charges to the card after January 1. Calculate your monthly payments. (a) $396 . 14 (b) $437 . 63 (c) $387 . 91 (d) $355 . 38 11. Identify the sampling method as simple random sampling, systematic sampling, convenience sampling, or stratified sampling. An IRS (Internal Revenue Service) auditor randomly selects for audits 50 taxpayers in each of the filing status categories: single, head of household, married filing jointly, and married filing separately. (a) Systematic sampling (b) Simple random sampling (c) Convenience sampling (d) Stratified sampling

12. Mikayla is in the 28% tax bracket and claims the standard deduction. How much will her tax bill be reduced if she qualifies for a $1000 tax credit? (a) Her tax bill will not be reduced at all. (b) $720 (c) $280 (d) $1000 13. Suppose you pay only the interest on a loan. Will the loan ever be paid off? (a) No. If only the interest is paid, the principal never decreases. (b) Yes. All payments are split evenly between interest and principal. (c) No. Interest increases consistently throughout the term of the loan. (d) Yes. If only the interest is paid, the principal will decrease over time. 14. Decide whether the following statement makes sense or does not make sense. In my statistical study, I used a sample that was larger than the population. (a) No, the statement does not make sense. A sample is a subset of the population and cannot be larger than the population. (b) No, the statement does not make sense. The sample size should always equal the population size. (c) Yes, the statement makes sense. A sample is always larger than the population. (d) Yes, the statement makes sense. A sample can be as large as desired. 15. A recent telephone poll of 995 randomly selected men revealed that 6 in 10 men believe there has been progress in finding a cure for cancer in the last 30 years. Identify the population in the given problem. (a) 6 out of 10 of the 995 men selected (b) 6 out of 10 men in the country (c) All men in the country (d) The 995 men selected 16. Compute the total cost per year of the following pair of expenses. Then complete the sentence: ”On an annual basis, the first set of expenses is % of the second set of expenses.” Everest’s cell phone bill is $83 . 00 per month, and they spend $230 per year on student health insurance. (a) On an annual basis, the money spent on the cell phone bill is 231% of the money spent on student health insurance. (b) On an annual basis, the money spent on the cell phone bill is 433% of the money spent on student health insurance. (c) On an annual basis, the money spent on the cell phone bill is 361% of the money spent on student health insurance. (d) On an annual basis, the money spent on the cell phone bill is 503% of the money spent on student health insurance.

18. (4E Lees) Sam is single. Her salary was $108 , 000, she earned $1100 in interest from her savings account, and she contributed $2500 to a tax-deferred retirement plan. Assume that she took the standard deduction. Tax Rate Single 10% up to $9325 15% up to $37 , 950 25% up to $91 , 900 28% up to $191 , 650 33% up to $416 , 700 35% up to $418 , 400 39 . 6% above $418 , 400 Standard deduction $6350 Exemption (per person) $4050 (a) What is Sam’s taxable income? Round your answer to the nearest cent. (You must show all your work and clearly identify your answer. No work, no credit.) (b) Calculate her taxes. Round your answer to the nearest cent. (You must show all your work and clearly identify your answer. No work, no credit.) Multiple Choice Workout Total Points: 80 20 100 Score: