Exam
Name___________________________________
SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question.
Provide an appropriate response.
1)
Explain in your own words multiple carrier insurance. Give two reasons for dividing
insurance among multiple carriers.
1)
2)
Explain in your own words the difference between comprehensive insurance and collision
insurance.
2)
3)
Describe three factors that determine the premium charged for fire insurance.
3)
4)
Describe life insurance premium factors and how they are used.
4)
5)
Give four forms of a tax rate and explain what each form means.
5)
6)
List four possible tax deductions, and explain the effect that a tax deduction has on taxable
income and on income tax due.
6)
7)
Describe the coinsurance clause and how it works.
7)
8)
Describe four factors that determine the premium on an automobile insurance policy.
8)
9)
List four sources of income for which an individual might receive W–2 and 1099 forms.
9)
10)
Define in your own words fair market value and assessed value. How is the assessment
rate used when finding the assessed value?
10)
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Find the property tax. Round to the nearest cent.
11)
Assessed valuation :$248,000
Tax rate :53 mills
11)
A)
$13,144.00
B)
$1314.40
C)
$131,440.00
D)
$4679.25
Solve the problem.
12)
Mark Stephens owns rental units with a replacement cost of $400,000 which are insured for
$248,000 with an 80% coinsurance clause. There is a fire loss of $28,100. How much will the
insurance company pay?
12)
A)
$21,778
B)
$28,100
C)
$17,422
D)
$26,133
Find the property tax. Round to the nearest cent.
13)
Assessed valuation :$30,200
Tax rate :6.6%
13)
A)
$199.32
B)
$1993.20
C)
$4575.76
D)
$457.58
Find the indicated premium. Round to the nearest cent.
14)
Find the monthly premium.
Face Value: $60,000
Age of Insured: 30
Sex of Insured: F
Type of Policy: Term
14)
A)
$113.40
B)
$10.30
C)
$109.20
D)
$9.92
Find the indicated tax rate.
15)
Percent Per $100
5.98%
15)
A)
$59.80
B)
$5.98
C)
59.8
D)
$0.60
Find the adjusted gross income.
16)
Juan and Amy Marino had incomes of $27,963 and $34,222. They also had $186 in stock dividends
and $805 in interest. They both contributed to their Individual Retirement Accounts in amounts of
$1096 and $1027.
16)
A)
$60,867
B)
$61,053
C)
$63,176
D)
$65,299
Solve the problem.
17)
A taxpayer’s property has a fair market value of $93,000. The rate of assessment in the area is 50%.
The tax rate is $2.90 per $100 of assessed valuation. Find the property tax.
17)
A)
$269,700.00
B)
$1348.50
C)
$134,850.00
D)
$2697.00
Find the tax refund or tax due. The letter following the name indicates the marital status, and all married people are filing
jointly. Assume a 52–week year. Use $3700 for each personal exemption; a standard deduction of $5800 for single people,
$11,600 for married people filing jointly, $5800 for married people filing separately, and $8500 for head of a household;
and the tax rate schedule.
5
18)
Name
Taxable
Income
Federal Income Tax
Withheld from Checks
Tax Refund
or Tax Due
K. Miller, S $23,005 $341.76 monthly
18)
A)
$2683.99 due
B)
$1075.37 due
C)
$1075.37 refund
D)
$2683.99 refund
6
Find the annual premium in territory 1.
19)
Operator age: 65
Comprehensive/Collision Age Group: 3
Driver’s ed: yes
Symbol: 7
Liability: 100/300
Property: $50,000
Uninsured motorist: yes
19)
A)
$630.00
B)
$648.00
C)
$745.20
D)
$582.00
Find the amount paid by each insurance company. Assume that any coinsurance requirement is met.
20)
Insurance loss: $53,000
Company A coverage: $120,000
Company B coverage: $80,000
20)
A)
A pays: $39,750
B pays: $13,250
B)
A pays: $53,000
B pays: $0
C)
A pays: $31,800
B pays: $21,200
D)
A pays: $26,500
B pays: $26,500
Solve the problem.
21)
A taxpayer’s property has a fair market value of $94,000. The rate of assessment in the area is 35%.
The tax rate is $5.34 per $100 of assessed valuation. Find the property tax.
21)
A)
$1756.86
B)
$5019.60
C)
$175,686.00
D)
$501,960.00
Find the adjusted gross income.
22)
Curt had income from these sources: $15,738 from his job, $54 in interest, and $211 in dividends. He
paid $3956 in alimony.
22)
A)
$11,993
B)
$12,047
C)
$19,959
D)
$16,003
Find the tax. Use $3700 for each personal exemption; a standard deduction of $5800 for single people, $11,600 for married
people filing jointly, $5800 for married people filing separately, and $8500 for head of a household; and the tax rate
schedule.
9
23)
Jennifer Binh is single and claims one exemption. Her salary last year was $86,749, and she had
other income of $6292 and interest income of $8365. She has adjustment to income of $2457 for an
IRA contribution. Her itemized deductions are $4380 in mortgage interest, $2424 in state income
tax, $1558 in real estate taxes, and $818 in charitable contributions.
23)
A)
$18,662.72
B)
$17,716.32
C)
$17,642.25
D)
$691.32
Find the total annual premium. Use the fire insurance rate table. Rates are for each $100 of insurance.
24)
Area Rating: 4
Building Classification: B
Building Value: $289,000
Contents Value: $108,000
24)
A)
$3035.30
B)
$2999.10
C)
$299.91
D)
$2312.80
Find the tax rate for the area. Round to the nearest tenth of a percent.
25)
Total tax needed: $324,000
Total assessed value: $44,319,000
25)
A)
7.0%
B)
0.9%
C)
0.6%
D)
0.7%
Find the amount paid by each of the multiple carriers.
26)
The Robinson Company had an insured fire loss of $948,000. It had insurance coverage as follows:
Company A, $725,000; Company B, $500,000; and Company C, $200,000. Find the amount paid by
each carrier assuming that the coinsurance requirement had been met.
26)
A)
$485,087.72, $346,491.23, $116,421.05
B)
$479,543.86, $327,087.72, $141,368.42
C)
$482,315.79, $332,631.58, $133,052.63
D)
$487,859.65, $338,175.44, $121,964.91
Solve the problem.
27)
A taxpayer’s property has a fair market value of $69,000. The rate of assessment in the area is 60%.
The tax rate is $3.54 per $100 of assessed valuation. Find the property tax.
27)
A)
$1506.96
B)
$1489.99
C)
$1465.56
D)
$1514.41
Find the amount of taxable income and the tax owed. The letter following the name indicates the marital status, and all
married people are filing jointly. Use $3700 for each personal exemption; a standard deduction of $5800 for single people,
$11,600 for married people filing jointly, $5800 for married people filing separately, and $8500 for head of a household;
and the following tax rate schedule.
12
28)
Name
Number of
Exemptions
Adjusted
Gross Income
Total
Deductions
Taxable
Income
Tax
Owed
C. John, S 1 $30,395 $3046
28)
A)
$24,595; $3264.25
B)
$26,695; $3579.25
C)
$23,649; $3122.35
D)
$20,895; $2709.25
Find the amount paid by each of the multiple carriers.
29)
The London Coat Company had an insured fire loss of $193,000. It had insurance coverage as
follows: Company A, $500,000; Company B, $350,000; and Company C, $150,000. Find the amount
paid by each carrier assuming that the coinsurance requirement had been met.
29)
A)
$106,150, $62,725, $24,125
B)
$96,500, $67,550, $28,950
C)
$101,325, $57,900, $33,775
D)
$91,675, $62,725, $38,600
Find the amount to be paid by the insurance company. Assume the policy includes an 80% coinsurance clause. Round to
the nearest dollar.
30)
Replacement Cost of Building: $288,000
Face Value of Policy: $259,000
Amount of Loss: $2200
30)
A)
$2200
B)
$1760
C)
$1956
D)
$2475
Find the tax refund or tax due. The letter following the name indicates the marital status, and all married people are filing
jointly. Assume a 52–week year. Use $3700 for each personal exemption; a standard deduction of $5800 for single people,
$11,600 for married people filing jointly, $5800 for married people filing separately, and $8500 for head of a household;
and the tax rate schedule.
14
31)
Name
Taxable
Income
Federal Income Tax
Withheld from Checks
Tax Refund
or Tax Due
T. Wilson, S $46,267 $166.30 weekly
31)
A)
$955.85 due
B)
$5696.15 due
C)
$955.85 refund
D)
$5696.15 refund
Find the indicated premium. Round to the nearest cent.
32)
Susan Meyer buys a premium term policy at age 25. The policy has a face value of $40,000. Find
the monthly premium.
32)
A)
$18.93
B)
$16.64
C)
$6.61
D)
$5.81
Solve the problem.
33)
The Midtown Deli building has a replacement cost of $89,000 and is insured for $62,300. It suffers a
fire loss of $7200. Find the amount of loss paid by the company. Assume an 80% coinsurance
clause.
33)
A)
$4800
B)
$7200
C)
$6300
D)
$5760
Find the indicated tax rate.
34)
Percent In Mills
4.53%
34)
A)
4.53
B)
$0.45
C)
$45.30
D)
45.3
Find the indicated premium. Round to the nearest cent.
35)
Find the total premium paid over 30 years for a universal life policy with a face value of $60,000.
Assume the policy is taken out by a 25–year–old man.
35)
A)
$9108.00
B)
$8640.00
C)
$4644.00
D)
$9198.00
Find the annual premium in territory 1.
36)
Operator age: 27
Comprehensive/Collision Age Group: 4
Driver’s ed: yes
Symbol: 7
Liability: 50/100
Property: $25,000
Uninsured motorist: yes
36)
A)
$592.00
B)
$526.00
C)
$917.60
D)
$1036.00
Find the amount paid by each insurance company. Assume that any coinsurance requirement is met.
37)
Insurance loss: $176,000
Company A coverage: $300,000
Company B coverage: $150,000
Company C coverage: $50,000
37)
A)
A pays: $176,000
B pays: $0
C pays: $0
B)
A pays: $105,600
B pays: $52,800
C pays: $17,600
C)
A pays: $88,000
B pays: $58,667
C pays: $29,333
D)
A pays: $58,667
B pays: $58,667
C pays: $58,667
Find the amount paid by each of the multiple carriers.
38)
The Robins Furniture Company had an insured fire loss of $197,000. It had insurance coverage as
follows: Company A, $475,000; Company B, $325,000; and Company C, $175,000. Find the amount
paid by each carrier assuming that the coinsurance requirement had been met.
38)
A)
$95,974.36, $65,666.67, $35,358.97
B)
$101,025.64, $63,141.03, $32,833.33
C)
$90,923.08, $60,615.38, $45,461.54
D)
$88,397.44, $63,141.03, $45,461.54
Find the assessed value for the property.
39)
Fair market value: $2,423,000
Rate of assessment: 58%
39)
A)
$1,017,660
B)
$14,053,400
C)
$1,405,340
D)
$702,670
Find the indicated premium. Round to the nearest cent.
40)
Find the annual premium.
Face Value: $30,000
Age of Insured: 50
Sex of Insured: M
Type of Policy: Universal life
40)
A)
$643.80
B)
$318.60
C)
$786.90
D)
$977.70
41)
SLM Instruments wants to protect itself in case of the death of its founder and head. It buys a
premium term policy on the executive with a face value of $130,000. She is 35 years old. Find the
quarterly premium.
41)
A)
$67.94
B)
$63.88
C)
$22.31
D)
$133.26