Testinar Grade 8 math

Personal Financial Literacy

Learn to reason about and solve Grade 8 problems involving Personal Financial Literacy.

CH01-05 Number Systems and Financial Reasoning

Name
Date
Score: ____ / 8

Directions Solve each problem. Show your reasoning on the page or on separate paper. Check the answer key only after finishing.

A household budget for monthly net income of $4{,}000 is divided as follows: Housing 35%, Food 20%, Transportation 15%, Utilities 10%, Savings 10%, Other 10%. How much is allocated to housing?
1. $400
2. $800
3. $1{,}400
4. $2{,}000
An investment grows with compound interest. If $1{,}000 is invested at 8% compound interest annually, which is the closest to the amount after 2 years?
1. $1{,}080
2. $1{,}160
3. $1{,}166
4. $1{,}200
A person compares two loans for $2{,}000: If the person wants to minimize total borrowing cost, which loan is better?
1. Need more information
2. Loan Y
3. They cost the same
4. Loan X
A freelancer's gross income is $5{,}000/month. After federal tax (15%), state tax (5%), and self-employment tax (15%), what is the net income?
1. $4{,}250
2. $3{,}500
3. $4{,}000
4. $3{,}250
A student invests $1{,}000 and compares: saving account at 2% simple interest vs investing at 5% simple interest for 4 years. What is the difference in final amounts?
1. $60
2. $80
3. $120
4. $200
Marco deposits $1{,}500 at an annual simple-interest rate of 4%. How much interest does he earn after 2 years?
1. $60
2. $150
3. $240
4. $120
Sarah invests $2{,}000 at 5% simple interest for 3 years. At the end of 3 years, she decides whether to withdraw all her money or let it grow another 3 years at the same rate. Which statement correctly predicts the impact of waiting another 3 years?
1. No additional interest accrues after 3 years
2. She will earn another $600 in interest (total after 6 years: $2{,}900)
3. Interest compounds, so she earns more than $300
4. She will earn another $300 in interest (total after 6 years: $2{,}600)
A bank offers 6% simple interest. If you deposit $5{,}000 for 18 months, how much interest will you earn?
1. $300
2. $900
3. $600
4. $450

Teacher and parent reference

Answer key and explanations

C. $1{,}400
Housing allocation = 35% of $4{,}000 = $0.35\times4000=$1{,}400$.
C. $1{,}166
$A=1000(1.08)^2=1000\times1.1664=$1{,}166.40\approx$1{,}166$.
D. Loan X
Loan X costs $200 in interest; Loan Y costs $240. Loan X is cheaper overall.
D. $3{,}250
Total tax rate: $15\% + 5\% + 15\% = 35\%$. Net income: $5{,}000 $\times$ (1 $-$ 0.35) = $5{,}000 $\times$ 0.65 = $3{,}250.
C. $120
Savings account: $A=1000(1+0.02\times4)=$1{,}080$. Investment: $A=1000(1+0.05\times4)=$1{,}200$. Difference: $1{,}200 $-$ $1{,}080 = $120.
D. $120
Simple interest: $I=Prt=1500\times0.04\times2=$120$. Distractor A is 1-year interest; C is double (wrong time calc); D confuses principal.
D. She will earn another $300 in interest (total after 6 years: $2{,}600)
After 3 years: $A=2000+2000\times0.05\times3=$2{,}300$. Another 3 years of simple interest on $2{,}000: $I=2000\times0.05\times3=$300$. Total: $2{,}300 + $300 = $2{,}600. (Note: Simple interest, not compound, means the same principal earns the same amount each 3-year period.)
D. $450
$18$ months $=1.5$ years. $I=5000\times0.06\times1.5=$450$.