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  • Value of learning: this graph shows the expected lifetime earnings, relative to high school graduates, by education level (Chart courtesy of College Board Trends in Higher Education)

    Value of learning: this graph shows the expected lifetime earnings, relative to high school graduates, by education level (Chart courtesy of College Board Trends in Higher Education)

How well did you do? Twenty-five test questions were provided in this column on March 3 and 10.

I’m expecting to hear from readers that they aced the test, because you should know that I went easy on you all. No fractions, statistics, or algebra.

Anyone doubting that fact, I’m happy to send you a copy of the Cambridge International Examinations Secondary 1 Checkpoint (sixth graders) and the Finra Mathematics Test Prep by Mometrix, a free practice test website for many professional designations.

Finra stands for the US Financial Industry Regulatory Authority, Inc, a self-regulatory agency dedicated to investor protection and market integrity through effective and efficient regulation of broker-dealers (https://www.testprepreview.com/modules/mathematics3.htm).

If you fancy a second chance to take the test before viewing the answers below, click on these links: https://goo.gl/9F2hJg and https://goo.gl/epsnXU.

Answers to questions 1-25

1 — c. Troy. We assume that Matt ran up his credit card for his vacation — at a much higher interest rate.

2 — b. and d., 70 per cent more and the sky is the limit. US Census 2008 statistics (see chart) track the earnings differences. However, many incredibly successful individuals never started or completed any university, eg Bill Gates, Mark Zuckerberg, Richard Branson, Russell Simmons, Larry Ellison, Ellen DeGeneres, the late Steve Jobs, Oprah Winfrey.

3 — d. The Bermuda Deposit Insurance Scheme 2016 does not yet appear to be enacted per my research (https://goo.gl/2HaV2m).

4 — a. Everyone should be aware of where their pension deductions go, and more importantly, to verify that their employer is contributing to the employer and employee share to your pensions, health insurance, and any other benefits due to you.

5 — a, b, c. New Money market accounts currently, in general, do not have a guaranteed $1 dollar share value, fund share value will fluctuate with capital market activity.

6 — b. The original cost basis $20 divided into $2 per share dividend is a 10 per cent return. However, an investor buying in at $25 per share receives the same $2 dividend, but a lower yield of 8 per cent.

7 — a. Pure math. $10,000 x .015 = $150 added to the amount = $10,150.

8 — c. This is a future value of money calculation to show how much an investment will be worth after compounding for so many years. F=P* (1+r) n

F= the Future Value

P = the present value times (1 plus the interest rate) where n is the amount of time — in this case compounded annually for five years. Convert the percentage 1.5 per cent to decimals.

10,000 x (1 plus .015) 5 years = $10,773

You can do this by hand, too. Simply multiply 10,000 x 1.015 = 10,150 x 1.015 = 10,302, then three more times = $10,773 (https://goo.gl/ywUcVe )

9. b. and c.: More than 60 per cent of individuals do not have wills.

10. a. 3¾ yards. Converting fractions to common denominators. Remember those?

11. 432

12. d. and c. also. The best answer since the adjustable-rate mortgage interest rate will increase above the fixed rate in a rising interest rate market, costing the homeowner more in the long run.

13. a. and c. Breaking down cost per gram of protein, 4 cents for hamburger, about 13 cents per gram of protein for crackers.

14. This was a problem solver.

Estimate the sales of yellow golf balls in year 4 to be about 250,000. Company sales increased by about 21,000 in year 2 and by about 11,000 in year 3, and an estimated increase of about 15,000 in year 4.

Adding 237,000 + 15,000 = 252,000 or about 250,000 yellow golf balls sold in year 4.

Next, calculate the number of white golf balls sold in year 4 using the given ratio. Since, it is estimated 250,000 yellow golf balls and the ratio of yellow to white is 1:5, multiply 2,500 x 5 = 1,250,000 white golf balls.

Add 250,000 to 1,250,000 to get an estimate of 1.5 million golf balls sold in year 4.

Number of boxes sold in year 4 estimated 125,000 since 1,500,000 / 12 = 125,000.

Multiply the total number of boxes by $24 per box (rounded up from $23.94).

Answer is estimated is $3 million for year 4 since 125,000 x 24 = 3,000,000.

15. b. Never ever link to, or use information from what appears to be a “real” bank, or any unidentifiable e-mail source. Always go directly to the bank’s or source’s actual website, or call them.

16. a and b. Another reminder to update your beneficiaries and to make a will. Beneficiaries on pension assets, insurance, and property titling are outside of inheritance rules — under contract law. So sorry, your ex will now receive the benefit of your hard work.

17. a. 4 + 9 × (6 - 4) = 22; b. 24 ÷ (12 - 8 + 2) = 4

18. c and d. Generally, the monthly payment is the same, but each month you should check to be sure that your principal balance is decreasing as more of the payment goes to principal and less to interest.

19. ($)1.89 5.40 = 1000g

0.54 = 100 g

0.26 = 50 g

3 × 0.54 + 0.26 = 1.88 rounded

20. c. and d. Cash value does accumulate over time.

21. b. You have more than doubled your money.

22. c. She has been working at the rate of ten papers per hour. There are 30 papers remaining that must be graded in the 2½ hours that she has left, which corresponds to a rate of 12 papers per hour of her previous rate, or 20 per cent faster.

23. d. Using a credit card calculator on the internet, it will take more than nine years to pay off the balance — without charging any more items. The total amount will be more than $10,000. (https://goo.gl/LshjMW )

24. b, c, and d. Be sure that you explore all alternatives when considering how to structure your retirement pension.

25. e. $4,950. The stock first increased by 10 per cent, that is, by $10 (10% of $100) to $110 per share. Then, the price decreased by $11 (10% of $110) so that the sale price was $110-$11 = $99 per share, and the sale price for 50 shares was 99 x $50 = $4,950.

There you have it.

Math and reasoning skills rusty? Check out Skills You Need (https://goo.gl/6z2rcE).

Martha Harris Myron, CPA, JSM: Masters of Law — International Tax and Financial Services, Pondstraddler Life™, financial perspectives for Bermuda islanders and their globally mobile connections on the Great Atlantic Pond. Personal financial columnist for The Royal Gazette. Contact: marthamyron@gmail.com

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Published Apr 7, 2018 at 8:00 am (Updated Apr 6, 2018 at 11:50 pm)

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