Ds ST Business Math

DSST
Introduction to Business Math

Time120 Minutes
100 Questions
Each incomplete statement is followed by four suggested

completions. Select the one that is best in each case.
1. Five years ago, the share price of a company was $10. Todays share price of $127 corresponds to a
percent increase of
(A)
(B)
(C)
(D)
117%
127%
1,170%
1,270%
2. Two days ago, the price of a stock was $100. Yesterday, the price decreased by 10%, while today the
price increased by 10%. What is the current price?
(A)
(B)
(C)
(D)
3.
$90
$99
$100
$110
The expression
(A)
(B)
(C)
(D)
3
11
2
3
is equivalent to which of the following?
2
11
6
22
9
22
6
11
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DSST Business Math
4. What values of x satisfy the compound inequality 4 < 6 5x < 12?

(A)
(B)
2
5
(C)
(D)
6
5
<x<
<x<
2
5
6
5
2
5
6
5
<x<
6
5
<x<
2
5
5. The total cost T for a manufacturing process is given by the formula T = NV + F, where N is the number
of items manufactured, V is the variable cost per item, and F is fixed cost. If it costs $240 to manufacture
3 items and $312 to manufacture 11 items, how much would it cost to manufacture 25 items?
(A)
(B)
(C)
(D)
$421
$438
$447
$452
6. Solve the equation 4(Q 8) = 20.

(A)
(B)
(C)
(D)
7
13
24
32
7. Solve the equation 4(d 6) = 28.

(A)
(B)
(C)
(D)
8.
1
8
13
52
Solve the equation

(A)
(B)
(C)
(D)
B
4
+ 3 = 15.
3
21
48
57
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DSST Business Math
9. An apparel shop sells skirts for $45 and blouses for $35. The shops entire stock at the beginning of the
month is worth $51,750. At the end of the month, only two thirds of the blouses and one half of the skirts
have been sold for a total of $30,600. How many blouses are left in the store?
(A)
(B)
(C)
(D)
260
270
520
810
10. A real estate agent receives $52,000 profit from the sale of some land and invests part at 5% interest and
the rest at 4% interest. If the agent earns a total of $2,290 interest per year, how much did the agent invest
at 4%?
(A)
(B)
(C)
(D)
$20,000
$21,000
$31,000
$32,000
11. Walter gave his sister 40% of his color pencils. If he had 45 color pencils, how many did Walter give his
sister?
(A)
(B)
(C)
(D)
5
18
27
40
12. The value x of a new piece of equipment depreciates by 20% of the original price each year over a 5-year
period. Three years from now, what will be the value of a piece of equipment that is new today?
(A)
(B)
(C)
(D)
0.2x
0.4x
0.6x
0.8x
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13. Which of the following is the most widely accepted disadvantage of using the mean as a measure of
central tendency?
(A)
(B)
(C)
(D)
The mean is difficult to compute as compared to other measures of central tendency.

The mean does not take all data points into consideration.
The mean is not reliable; it changes considerably for repeated samples.
The mean is influenced by extreme values (skewed distributions).
14. Given five numbers, which of the statements below is always true?
(A)
(B)
(C)
(D)
The arithmetic mean cannot be smaller than the largest one of the numbers.
The arithmetic mean cannot be smaller than the smallest two of the numbers.
The arithmetic mean cannot be smaller than the median.
The arithmetic mean cannot be smaller than three of the numbers.
15. A construction company pays its hourly employees $18.50, $16.50, $20.50, $17.50, and $22.50 per hour.
What are the mean and the median hourly rates paid to the employees?
(A)
(B)
(C)
(D)
Mean = $18.90 and median = $20.50

Mean = $18.50 and median = $18.90
Mean = $19.10 and median = $18.50
Mean = $16.50 and median = $22.50
16. Find the mode and the median in the following daily production of pizzas in a pizza parlor for the first
two weeks of February:
155, 150, 153, 165, 145, 160, 153, 160, 149, 153, 160, 148, 147, 160
(A)
(B)
(C)
(D)
Mode = 153 and median = 160

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17. Calculate the sample standard deviation for the following data set. Round the final answer to the nearest
tenth.
85.6, 94.3, 58.5, 45.5, 79.1, 68.7
(A)
(B)
(C)
(D)
16.4
16.5
18.0
18.1
18. The total number of college credits for a sample of college students is given below:
(A)
(B)
(C)
(D)
College Credits
Frequency
024
2549
5074
7599
100124
125149
44.4
44.5
46.0
46.8
19. A pizza recipe calls for
2
9
cup of tomato sauce. A recipe for spaghetti sauce requires 1 56 cups of tomato
sauce. How much tomato sauce is needed for both recipes?

(A)
11
27
7
(B)
(C)
(D)
15
11
18
1
18
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DSST Business Math
20. A company creates the following table to estimate the expected value of its new product.
$2,000,000
$10,000
$100,000
$1,000,000
$10,000,000
15%
15%
15%
25%
15%
15%
What is the approximate expected value of the new product in millions of dollars?
(A)
(B)
(C)
(D)
$0.10
$1.38
$1.52
$9.11
21. Find the solution to the system of equations.

2 x + y = 7
x 2 y = 1
(A)
(B)
(C)
(D)
(1, 5)
(2, 3)
(3, 1)
no solution
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22. Which of the following are NOT valid histograms of a probability distribution?
I.
II.
III.
IV.
(A)
(B)
(C)
(D)
I and II
I and IV
II and III
III and IV
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23. The following is the frequency distribution table of the number of sales made by 20 salespeople on a
given day:
Number of Sales
Frequency
This distribution table shows that

(A)
(B)
(C)
(D)
fifty percent of the salespeople had less than 3 sales.

forty-five percent of the salespeople had between 2 and 4 sales.
thirty-five percent of the salespeople had only 2 sales.
twenty percent of the salespeople had more than 4 sales.
24. The average weight of a particular mixed fruit bag is 1.81 kg, with a standard deviation of 0.05 kg. If the
weights of all the bags are normally distributed, what is the percentage of bags that weigh less than 1.76
kg?
(A)
(B)
(C)
(D)
2.5%
13.5%
16.0%
34.0%
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25. What is the average yearly profit for the business below? The business operated for only 8 months in the
year in 2001 and the data is reported for only the first 7 months in 2005. Round the result to the closest
number listed. (Use the number of months to calculate the weighted average yearly revenue to correct for
the partial years 1 and 5).
(A)
(B)
(C)
(D)
Year
2001
(May-Dec)
2002
2003
2004
2005
(Jan-Jul)
Profit
$120,000
$200,000
$220,000
$245,000
$150,000
$187,000
$199,000
$200,000
$220,000
26. A student received a 92% score on the first test, a 95% on the second test, and 91% on the final. The
student received 100% on the homework. According to the syllabus, each test counts twice as much as
the homework and half as much as the final exam. What is the average score for the course, weighted as
prescribed by the syllabus?
(A)
(B)
(C)
(D)
93.1%
93.6%
94.1%
94.5%
27. What is the weighted mean (to the nearest tenth) for the data in the following table?
(A)
(B)
(C)
(D)
Value
5
Frequency
6
3.0
3.9
4.0
6.3
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28. From the following, calculate the weighted average unit cost, rounded to the nearest cent:
(A)
(B)
(C)
(D)
Number of goods
purchased for resale
Cost per unit
April 1 inventory
40
$4
May 1
50
$3
October 1
30
$5
December 1
70
$2
$2
$3
$3.16
$3.50
29. From the following, calculate the weighted average unit cost, rounding to the nearest cent:
(A)
(B)
(C)
(D)
Number of goods
purchased for resale
Cost per unit
April 1 inventory
30
$8
May 1
25
$9
October 1
20
$10
December 1
20
$13
$8.65
$9.53
$9.74
$10.87
30. Find the roots of the equation y = x2 3x 28.

(A)
(B)
(C)
(D)
{7, 4}
{7, 4}
{4, 7}
{4, 7}
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31. A students test grade of 70 represents the 78th percentile of the grades. What percent of students scored
higher than 70?
(A)
(B)
(C)
(D)
22%
23%
77%
78%
32. Which of the following is the graph of y = 2x 3?
(A)
(B)
(C)
(D)
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33. What amount of money needs to be deposited in a bank now at 3.29% effective yield to allow cash
payment for a $20,000 car 5 years from now?
34.
(A)
(B)
(C)
(D)
$17,012
$17,175
$19,342
$20,000
When i =
1
in the formula A = P(1 + i)n, which of these is true as n approaches infinity?
n
(A)
(B)
A approaches P.
A approaches eP.
(C)
(D)
A approaches 2 P.
A approaches 0.
35. Which of these banks should a business use to receive the maximum interest on its deposits?
(A)
(B)
(C)
(D)
A bank that pays 3.15% interest, compounded annually

A bank that pays 3.10% interest, compounded semi-annually
A bank that pays 3.05% interest, compounded quarterly
A bank that pays 3% interest, compounded monthly
36. A person borrows money for car repairs and agrees to pay a total of $140.60 interest at an annual rate of
5% for a period of 9 months. How much has the person borrowed using the simple interest method?
(Round to the nearest dollar.)
(A)
(B)
(C)
(D)
$312
$937
$2,109
$3,749
37. After purchasing a wristwatch for $420 on a 15%, 180-day note, a customer pays the note on day 120.
How much did the customer save by prepaying the note? Assume a 360-day year and that there are no
prepayment penalties.
(A)
(B)
(C)
(D)
$10.36
$10.50
$21
$31.50
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38. A car was bought at the end of the year 2002 for $22,000 and is worth $9,000 at the end of the year 2009.
Assuming the depreciation is linear, what is the approximate annual depreciation rate?
(A)
(B)
(C)
(D)
$1,440
$1,750
$1,860
$2,070
39. A company uses straight-line depreciation to write off the cost of a $100,000 piece of equipment over the
next 20 years. If the annual depreciation expense is $4,000, what is the salvage value of the equipment?
(A)
(B)
(C)
(D)
$4,000
$5,000
$10,000
$20,000
40. A business purchased a mainframe computer for $200,000 that at the end of its useful life of 5 years has a
residual value of $50,000. If the declining-balance method with depreciation rate 30% is used, what are
the book values of the computer at the beginning of each of the 5 years?
(A)
(B)
(C)
(D)
$200,000; $140,000; $98,000; $68,600; and $48,020

$200,000; $140,000; $98,000; $68,600; and $50,000
$200,000; $160,000; $120,000; $80,000; and $40,000
$200,000; $170,000; $140,000; $110,000; and $80,000
41. A property owner buys a refrigerator for a rental unit for $3,500. The book value of the refrigerator is
$500 at the end of 5 years. Using the declining-balance method, given that the depreciation rate is twice
the rate of the straight-line method, what is the book value at the end of the second year?
(A)
(B)
(C)
(D)
$840
$1,200
$1,260
$1,400
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42. Company ABC buys equipment for $10,000. At the end of 5 years, the book value will be $2,000. Find
the book value at the end of the second year. Use the declining-balance method, given that the
depreciation rate is twice the rate of the straight-line method.
(A)
(B)
(C)
(D)
$2,400
$3,600
$4,000
$6,000
43. If a bank charges a discount of 6% for a 6-month loan, what is the equivalent interest rate?
(A)
(B)
(C)
(D)
3.0%
6.0%
6.2%
6.5%
44. Which of the following statements is TRUE for a simple discount note?
(A)
(B)
(C)
(D)
The discount is equal to the discount rate applied to the proceeds of the loan.
The discount is the difference between the nominal interest rate and a lower interest rate
charged for the loan.
The discount is the interest deducted in advance from the amount of the loan.
The discount is the option that the borrower can pay back the loan early at a lower interest
rate.
45. A baker borrows $10,000 from a bank to purchase a franchise bakery. The loan is at 7.25% payable at the
end of the year. Six months into the year, the baker decides to purchase a new high-efficiency oven and
gets a simple 12% discount note from the bank against the loan (the full value of the discount note should
pay for the loan balance at the end of the year). How much cash does the baker get for the discount note?
(A)
(B)
(C)
(D)
$10,000.50
$10,081.50
$10,600.75
$10,725.25
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46. Complete the following table by calculating the discount and credit periods using the receipt of goods
(ROG) method and assume a non-leap year.
(A)
(B)
(C)
(D)
Invoice
date
Date of goods
received
Terms
June 20
July 27
3/10, n/30
ROG
Last day of discount

period
Final day bill is due

(end of credit period)
June 29, July 19

June 30, July 20
August 5, August 25
August 6, August 26
47. Complete the following table by calculating the discount and credit periods.
(A)
(B)
(C)
(D)
Invoice
date
Terms
February 25
3/10, EOM
Last day of discount

period
Final day bill is due

(end of credit period)
March 7, March 27
March 10, March 30
April 10, April 20
April 10, April 30
48. A loan of $9,000 is to be paid in 24 monthly installments of $440. If the loan is repaid at the end of 9
months, what is the final pay off?
(A)
(B)
(C)
(D)
$6,065
$6,366
$8,376
$8,766
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49. The monthly payment on a $64,000 loan at 12% annual interest is $704.64. Approximately how much of
the first monthly payment will go toward interest?
(A)
(B)
(C)
(D)
$60
$64
$640
$644
50. The monthly payment on a $61,000 loan at 11% annual interest rate is $693.57. How much of the first
monthly payment will go toward the principal?
(A)
(B)
(C)
(D)
$93.57
$134.40
$559.17
$600
51. An advertisement offers a car for $11,900 with 60 monthly payments of $199 and a down payment of
$199. What is the amount financed and what is the deferred payment price?
(A)
(B)
(C)
(D)
Amount financed: $11,900; deferred payment price: $11,940

52. A customer who bought a lawn mower for $650 using a 5-month payment plan of $150 per month
decided to pay off the balance at the end of the third month. What was the payment?
(A)
(B)
(C)
(D)
$350
$410
$450
$490
53. A sports shop buys fishing poles for $50 each. The shop adds a 45% markup to each fishing pole. What is
the selling price? (Round to the nearest penny.)
(A)
(B)
(C)
(D)
$72.50
$77.50
$90.91
$111.11
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54. A corporation with $250,000 annual taxable income has a federal corporate tax rate of 39% and a state
corporate tax rate of 4.63%. If state taxes are deductible on the corporations federal income taxes, then
the total annual tax rate for the corporation is
(A)
(B)
(C)
(D)
34.27%
41.82%
43.63%
45.44%
55. A company plans to locate a new manufacturing plant in a state with a 4% corporate tax rate. The
company will receive a 50% tax credit for each of the first 3 years after the plant begins operation. How
much will the total tax credit be if the companys taxable income in the first year is $300,000 and doubles
each year after that?
(A)
(B)
(C)
(D)
$6,000
$12,000
$36,000
$42,000
56. A company sells one of its cars with a current book value of $10,000 to a private party for $12,000. What
happens to the companys taxable income as a result of the sale?
(A)
(B)
(C)
(D)
It decreases by $12,000.
It decreases by $2,000.
It increases by $2,000.
It increases by $12,000.
57. The cost function of a whitewater rafting business is given by the formula C(x) = $25,000 + $70x, where
x represents the number of customers. What is the average cost per customer if the business has 2,000
customers?
(A)
(B)
(C)
(D)
$70
$75
$83
$88
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58. An office-supply store pays its stockers according to the following weekly differential pay schedule:
(A)
(B)
(C)
(D)
Items Stocked
Amount per Item
1500
$0.30
5011000
$0.50
Over 1000
$0.60
$520
$560
$600
$720
59. A pizza restaurant pays its delivery drivers according to the following weekly differential pay schedule:
(A)
(B)
(C)
(D)
Orders Delivered
Amount per Order
160
$3.00
61100
$3.50
Over 100
$4.50
$420
$490
$500
$630
60. A small business is selling widgets for $125 each. The per-widget production costs are $97.50, and the
business can sell 130 widgets per month. What level of fixed costs per month would correspond to the
business breaking even (revenues equal the expenses)?
(A)
(B)
(C)
(D)
$3,575
$3,610
$3,625
$3,652
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61. A small airline has fixed expenses of $10,000 per month and can sell tickets for $250 per seat. The
variable costs are $200 per passenger. If the airline starts with 100 tickets sold per month in January and
hopes to increase sales by 30 additional tickets each month, what is the first month of the year when it
will break even?
(A)
(B)
(C)
(D)
February
March
April
May
62. A mobile phone manufacturer has fixed costs of $100,000 per month. The per-phone production cost is
typically 50% of the manufacturers suggested retail price, while phones normally sell for $60 after a
discount of 25% off the manufacturers suggested retail price. How many phones does the manufacturer
need to sell per month to break even?
(A)
(B)
(C)
(D)
1,000
2,000
5,000
10,000
63. A company that produces pens sells each for $1.99. Its variable cost per unit is $0.74. What is the
contributing margin (CM) and the breakeven point (BE) for the company assuming it has a fixed cost of
$75,000?
(A)
(B)
(C)
(D)
CM = $0.74; BE = 101,352
CM = $1.25; BE = 37,689
CM = $1.25; BE = 60,000
CM = $1.99; BE = 37,689
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64. A restaurant sells pizzas for $9.99 each with the variable cost for making one pizza being $3.50.
Assuming an annual fixed cost of $815,000, use the given graph to determine what the breakeven point
(BE) is.
(A)
(B)
(C)
(D)
BE = 232,858
BE = 150,000
BE = 125,578
BE = 81,582
65. The following is a part of the annual report of a small business company:
(Dollars in millions)
Net revenue (sales)
Net earnings
147
Total assets
2,015
Total liabilities
1,768
Total stockholders equity
(A)
(B)
(C)
(D)
$ 265
427
34.43%
44.53%
57.85%
62.06%
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66. From the following facts, find the current ratio. Round the final answer to the nearest hundredth
(A)
(B)
(C)
(D)
Current assets
$14,000
Accounts
receivables
$5,000
Current liabilities
$20,000
Inventory
$4,000
Net sales
$40,000
Total assets
$38,000
Net income
$10,100
0.61
0.70
0.90
0.95
67. Give the trend analysis for the following companys net income assuming that the base year is 2005.
Round to the nearest whole percent.
Year
Net income
(A)
(B)
(C)
(D)
2005
2006
2007
$54,000
$42,000
$64,000
Year
2005
2006
2007
Net income
100%
78%
119%
Year
2005
2006
2007
Net income
100%
129%
84%
Year
2005
2006
2007
Net income
84%
66%
100%
Year
2005
2006
2007
Net income
100%
78%
152%
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68. Using 2009 as the base year, express sales, gross profit, and net income to give a trend analysis for 2010.
(Round to the nearest percent.)
Given (Base Year 2009)
2010
2009
Sales
225,000
215,000
Gross Profit
90,000
110,000
Net Income
80,000
65,000
Trend Analysis
2010
(A)
2009
Sales
105%
100%
Gross Profit
82%
100%
Net Income
123%
100%
Trend Analysis
2010
(B)
2009
Sales
96%
100%
Gross Profit
122%
100%
Net Income
81%
100%
Trend Analysis
2010
(C)
2009
Sales
100%
106%
Gross Profit
100%
82%
Net Income
100%
123%
Trend Analysis
2010
(D)
2009
Sales
100%
96%
Gross Profit
100%
122%
Net Income
100%
81%
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69. From the information given, what is the profit margin of net sales for Mays Flower Shop?
Mays Flower Shop
(A)
(B)
(C)
(D)
Total Current Assets:
$10,000
Accounts Receivable:
$12,000
Total Current Liabilities:
$ 4,000
Inventory:
$ 8,000
Net Sales:
$15,000
Total Assets:
$20,000
Total Liabilities:
$ 6,000
Net Income:
$ 6,000
20%
30%
40%
50%
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70. Which of the following histograms shows the coffee-drinking habits of the people in one office if 5
people drink either 1 or no cups of coffee, 4 people drink 2 cups, 6 people drink 4 cups, and 3 people
drink 5 cups?
(A)
(B)
(C)
(D)
71. Stock in Value Unlimited Ltd. sells for $150 per share, which puts it at a P/E ratio of 25. The P/E ratio is
the ratio of the stock price per share to the dividend paid per share. What is the expected dividend for a
stockholder who owns 1,000 shares?
(A)
(B)
(C)
(D)
$3,750
$6,000
$25,000
$150,000
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DSST Business Math
72. Troglodyte Networks Inc. has 1.5 million shares outstanding and is trading at $20 per share. The P/E
ratio is the ratio of the stock price per share to the dividend paid per share and is 10 for Troglodyte. What
total amount of earnings is the company expected to pay?
(A)
(B)
(C)
(D)
$3,000,000
$15,000,000
$30,000,000
$150,000,000
73. A company with 2.5 billion shares outstanding announced earnings per share of $2. The company stock
is valued at $40 billion. What is the P/E ratio for the company (the P/E ratio being the ratio of the stock
price per share to the dividend paid per share)?
(A)
(B)
(C)
(D)
1.25
8
16
20
74. From the following Dow stock quotation calculate the price-earnings ratio (P/E ratio) (to the nearest
whole number) and the yield (YLD) on the stock (to the nearest tenth percent). Assume Dow earns
annually $5.48 per share.
52 WEEKS
(A)
(B)
(C)
(D)
HI
LO
45.87
15.98
STOCK
(SYM)
DIV
XYZ
2.19
YLD
%
VOL
100S
CLOSE
NET
CHG
20580
93.64
+.83
P/E = 17; YLD = 2.3%

P/E = 17; YLD = 5.9%
P/E = 43; YLD = 2.3%
P/E = 43; YLD = 5.9%
75. Find the minimum value of z = 23x + 21y + 22 subject to: x

(A)
(B)
(C)
(D)
PE
0, y 0 and x + y
1.
22
43
45
63
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DSST Business Math
76. A company designs and sells two types of rings, M and N, and can produce up to 24 rings each day using
up to 60 total hours of labor. If it takes 3 hours to make one M ring, versus 2 hours to make one N ring,
what is the maximum profit possible, if the profit on a M ring is $30 and on a N ring is $40?
(A)
(B)
(C)
(D)
$880
$960
$1040
$1120
77. A manufacturer of bicycles builds one-, three-, and ten-speed models of both aluminum and steel. The
company has available 91,800 units of steel and 42,000 units of aluminum. The one-, three-, and tenspeed models respectively need 20, 30, and 40 units of steel and 12, 21, and 16 units of aluminum. The
company makes a profit of $8 per one-speed bike, $12 per three-speed bike, and $24 per ten-speed bike.
What is the maximum possible profit?
(A)
(B)
(C)
(D)
$54,360
$55,080
$56,420
$57,195
78. Minimize z = 3x + 2y, subject to the constraints x + y

(A)
(B)
(C)
(D)
100 and 3x + 4y
350, with x
0 and y
0.
0
180
400
440
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DSST Business Math
79. The following table is a section of a 12-month amortization schedule for a loan of $1,000.
Payment
Number
Payment
Amount
Interest for
Period
Portion to
Principal
Principal at
end of Period
$88.85
7.61
$81.24
$679.84
$88.85
6.80
$82.05
$597.79
$88.85
5.98
$82.87
$514.92
According to the table, what is the total amount paid to the loans principal during months 4, 5, and 6?
(A)
(B)
(C)
(D)
$20.39
$164.92
$246.16
$266.55
80. Five years from now, a company will have to replace a machine that will cost $2 million. Approximately
how much money should the company start putting aside in a bank account at 6% per year to ensure the
money for replacement will be available?
(A)
(B)
(C)
(D)
$1,410,000
$1,495,000
$1,570,000
$1,887,000
81. The amount of money A that must be added each year to a bank account paying i% annual interest to
create a desired future value F after n years can be calculated by the formula:
A=
Fi
(1 + i )n 1
According to the formula, approximately how much money should be added to the account each year at
4.5% annual interest to create a value of $1,000,000 twenty-four years from now?
(A)
(B)
(C)
(D)
$24,000
$28,800
$41,700
$45,000
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DSST Business Math
82. A person deposits $2,000 split between two bank accounts, both advertising a rate of 5%. On account A,
interest is compounded semi-annually, while on account B, interest is compounded daily (assume a 365day year). How much more money will there be in account B than in account A at the end of the year?
(A)
(B)
(C)
(D)
$0.64
$0.96
$1.03
$1.14
83. What annual percentage rate compounded annually is needed to grow $250,000 into $270,000 in 6 years?
(A)
(B)
(C)
(D)
1.25%
1.29%
1.33%
1.35%
84. A worker deposits a promotion bonus of $x in an interest bearing account at rate r1 compounded monthly.
Six years later, the rate decreases to r2, still compounded monthly. Another four years later, the worker
consults a financial planner and learns that because of the change to the lower rate the account is now
worth only 80% of what it could have been had the higher rate remained in effect for the entire period.
What is the incremental difference between rates r1 and r2?
(A)
(B)
(C)
(D)
1.83%
2.74%
3.63%
5.57%
85. A designer signs an agreement to pay a bank $25,000 in 5 months. The bank charges a 13% discount rate.
Calculate the actual interest rate paid by the designer. Round the final answer to the nearest tenth percent.
(A)
(B)
(C)
(D)
13.0%
13.7%
13.8%
14.0%
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DSST Business Math
86. Find the effective annual rate corresponding to a nominal annual rate of 12% compounded monthly.
Round the final answer to the nearest hundredth percent.
(A)
(B)
(C)
(D)
12.00%
12.67%
12.68%
12.69%
87. Find the effective annual rate corresponding to a nominal annual rate of 8% compounded quarterly.
(A)
(B)
(C)
(D)
8.00%
8.21%
8.22%
8.24%
88. Four banks, A, B, C, and D, charge interest, respectively, at the rate of 8.06% compounded monthly,
8.12% compounded quarterly, 8.25% compounded semiannually, and 8.35% compounded annually.
Which of these four banks charges the highest finance charge on the money borrowed?
(A)
(B)
(C)
(D)
Bank A
Bank B
Bank C
Bank D
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DSST Business Math
89. An airline charges the following fees based on the weight of a passengers checked luggage:
I. No fee for luggage weighing up to 40 pounds
II. Flat fee of $50 for luggage weighing between 40 and 80 pounds
III. Additional fee of $1.25 per pound for luggage weighing more than 80 pounds
Which of the following graphs represents this situation?
(A)
(B)
(C)
(D)
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DSST Business Math
90. Suppose the tax, T, paid by a person with taxable income of x dollars is given by the following function:
0.05 x if 0 x 20,000
T ( x) =
0.1x 1, 000 if x > 20,000
What is the tax that a person with a taxable income of $30,000 will have to pay?
(A)
(B)
(C)
(D)
$1,000
$1,500
$2,000
$2,500
91. The profit P, in thousands of dollars, of a company is given as a function of the number x of units it sells:
P(x) = 0.4x2 + 12x 15
What is the profit if the company sells 10 units?
(A)
(B)
(C)
(D)
$65,000
$101,000
$109,000
$145,000
92. Emile bought two jackets for $35.75 each, three pairs of jeans for $25, and a hat for $10.60. What is the
total price of the items she purchased?
(A)
(B)
(C)
(D)
$71.35
$107.10
$132.10
$157.10
93. Jason is being paid $120 a month for a bike that he sold with an interest rate of 5% compounded monthly
for 4 years. What is the present value?
(A)
(B)
(C)
(D)
$5,318.87
$5,760
$5,990.40
$6,048
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DSST Business Math
94. Al plans to loan his friend $10,000 to open a restaurant. Al will collect the loan in 7 years with an interest
rate of 7% compounded annually. How much will Al receive at the end of the loan term?
(A)
(B)
(C)
(D)
$10,415.55
$10,770
$16,057.81
$22,521.92
95. Jan received $15,000 in graduation gifts. She placed it in an account paying 7% interest compounded
semi-annually. Two years later, she inherited $7,000 and placed it in the same account. How much will
she have at the end of 5 years?
(A)
(B)
(C)
(D)
$23,540
$29,613.58
$30,856.14
$96,000
96. Stan bought a 4-year certificate of deposit for $10,000 with a rate of 6% compounded semi-annually.
How much will he make in interest after 4 years?
(A)
(B)
(C)
(D)
$600
$2,624.77
$2,667.70
$12,667.70
97. Kevin is saving for his senior trip. He plans to place $300 in an account every quarter for 2 years with 8%
interest compounded quarterly. What will be the final total?
(A)
(B)
(C)
(D)
$858
$2,574.89
$3,200
$3,433.19
98. What is the effective annual rate of interest for a loan with a nominal interest rate of 9%? The loan is
compounded monthly. Round the final answer to the nearest thousandth percent.
(A)
(B)
(C)
(D)
9.000%
9.308%
9.381%
9.416%
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DSST Business Math
99. What is the effective annual rate of interest for a savings account with a nominal interest rate of 1.5%?
The loan is compounded daily. Round the final answer to the nearest thousandth percent.
(A)
(B)
(C)
(D)
1.500%
1.509%
1.511%
3.000%
100. Carl has $1,000 to invest. If he would like to have $1,500 at the end of three years, what should be the
interest rate of the investment account? Round the final answer to the nearest hundredth percent.
(A)
(B)
(C)
(D)
13.89%
16.67%
50.00%
66.67%
33
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Peterson's

ANSWER KEY
DSST Business Math
1. The correct answer is C. Find the difference between the current price and the original price and divide
the result by the original price:
$127 $10 = $117
$117
$10
= 11.7, or 1,170%
2. The correct answer is B. Find the product of the original stock price, 1 minus 10%, and 1 plus 10%:
$100 0.90 1.10 = $99
3. The correct answer is C. Multiply the first fraction by the reciprocal of the second fraction:
3
11
22
4. The correct answer is A. Subtract 6 from each part, divide each part by 5, and reverse each inequality
sign:
4 < 6 5 x < 12
2 < 5 x < 6
2 5 x 6
<
<
5 5 5
6
2
<x<
5
5
5. The correct answer is B. Subtract the equations and then simplify:

T = NV + F
$312 = 11V + F
$240 = 3V + F
$72 = 8V
$9 = V
Substitute V = $9 into the first equation and solve for F:
ANSWER KEY - Page 34
ANSWER KEY
DSST Business Math
$312 = 11 $9 + F
$312 = $99 + F
$213 = F
Plug N = 25, V = $9, and F = $312 into T = NV + F and solve:

T = 25 9 + $213 = $438
6. The correct answer is B. Divide both sides by 4; then add 8 to both sides:
4 ( Q 8 ) = 20
Q 8 = 5
Q = 13
7. The correct answer is C. Divide both sides by 4; then add 6 to both sides:
4(d 6) = 28
d 6=7
d = 13
8. The correct answer is C. Subtract 3 from both sides; then multiply both sides by 4:
B
4
+ 3 = 15
B
= 12
4
B = 48
9. The correct answer is B. The beginning inventory equation is:

$45s + $35b = $51,750
The inventory sold equation is:
$45
2
s+
$70
3
b = $30, 600
Then employ the elimination method. Multiply the inventory sold equation by 2 so that coefficient of s is the
same in each equation:
ANSWER KEY
DSST Business Math
$45
2
s+
$70
3
$140
$45s +
b = $30, 600
b = $61, 200
You can then eliminate the s-term and solve for b, the beginning number of blouses:
35
3
b = 9, 450
b = 810
Substitute b = 810 into the first equation and solve for s, the beginning number of skirts:
45s + 35(810) = 51, 750
s = 520
Then multiply the beginning number of blouses by one-third:

1
810 = 270
3
10. The correct answer is C. The questions produces two equations:

x + y = $52,000
and
0.05x + 0.04y = $2,290,
where x is the amount invested at 5% and y is the amount invested at 4%.
This is the elimination method. Multiply the second equation by 20 so that coefficient of x is the same in each
equation:
x + 0.8y = $45,800
You can then eliminate the x-term and solve for y.
0.2 y = $6, 200
y = $31, 000
11. The correct answer is B. Find the product of 40% and 45:
ANSWER KEY
DSST Business Math
0.4 45 = 18
12. The correct answer is B. From 1, subtract the product of 3 and 20% to find the coefficient of x:
1 (3 0.2) = 0.4
The value after three years is 0.4x.
13. The correct answer is D. The biggest disadvantage to using the mean as a measure of central tendency is
that it is affected by outliers (extreme values).
14. The correct answer is B. The arithmetic mean cannot be smaller than the smallest two of the numbers.
15. The correct answer is C. Divide the sum of the elements by 5 to find the mean:
$18.50 + 16.50 + 20.50 + 17.50 + 22.50
= $19.10
5
To find the median, put the elements in ascending order then find the middle element:
$16.50, $17.50, $18.50, $20.50, $22.50
16. The correct answer is C. Write the elements in ascending order:

145, 147, 148, 149, 150, 153, 153, 153, 155, 160, 160, 160, 160, 165
The element that occurs most often, 160, is the mode.
The average of the two middle values is the median:
153 + 153
= 153
2
17. The correct answer is C. Find the mean:

85.6 + 94.3 + 58.5 + 45.5 + 79.1 + 68.7
= 71.95
6
Square the difference between the mean and each element:
ANSWER KEY
DSST Business Math
(85.6 71.95)2 = 186.3225

(94.3 71.95)2 = 499.5225
(58.5 71.95)2 = 180.9025
(45.5 71.95)2 = 699.6025
(79.1 71.95)2 = 51.1225
(68.7 71.95) 2 = 10.5625
Take the square root of the average of the previous values:
186.3225 + 499.5225 + 180.9025 + 699.6025 + 51.1225 + 10.5625
6 1
= 18.0
18. The correct answer is C. Find the mean of the midpoints of the classes:
85.6 + 94.3 + 58.5 + 45.5 + 79.1 + 68.7
= 71.95
6
Square the difference between the mean and each element:
(85.6 71.95)2 = 186.3225
(94.3 71.95)2 = 499.5225
(58.5 71.95)2 = 180.9025
(45.5 71.95)2 = 699.6025
(79.1 71.95)2 = 51.1225
(68.7 71.95) 2 = 10.5625
Take the square root of the average of the previous values:
186.3225 + 499.5225 + 180.9025 + 699.6025 + 51.1225 + 10.5625
6 1
= 18.0
ANSWER KEY
DSST Business Math
19. The correct answer is D. Rewrite each fraction using the least common denominator, which is 18:
2
9
4
18
and
5 11 33
1 = =
6 6 18
Add the fractions together and then simplify:

4
18
33
18
37
18
1
=2
18
20. The correct answer is B. Find the sum of the products of each percent and value pair (in millions):
(0.15 2) + (0.15 0) + (0.15 0.01) + (0.25 0.1) + (0.15 1) + (0.15 10) = 1.38
21. The correct answer is C. Multiply the second equation by 2 and get:
2x + 4y = 2
Add this equation to the first equation, then solve for y:
5y = 5
y =1
Substitute y = 1 into the first equation, then solve for x:

2 x + (1) = 7
2x = 6
x=3
The solution is (3, 1).
ANSWER KEY
DSST Business Math
22. The correct answer is D. The values for a probability distribution total 1. The values in graph III total
0.8 and the values in graph IV total 1.2.
23. The correct answer is A. There were 10 people with less than 3 sales. That amounts to 50% of the
salespeople surveyed.
24. The correct answer is C. The value 1.76 is one standard deviation below the mean. In a normal
distribution, one to four standard deviations below the mean accounts for about 15.8% of the set, which is
about 16%.
25. The correct answer is B. Multiply each profit by the number of months reported. Then add the values
and divide by the total months in the table:
(8 120,000) + (12 200,000) + (12 220,000) + (12 245,000) + (7 150,000)
= $195,882.35
8 + 12 + 12 + 12 + 7
26. The correct answer is A. If homework counts for h, then a test counts for 2h and the final counts as 4h.
Set the sum of the values of each assignment equal to 100 and solve for h:
h + 2h + 2h + 4h = 100
h=
Test one: 0.92 2
100
= 20.4
9
Test two: 0.95 2
100
= 21.1
9
Homework: 100 1
100
9
100
= 11.1
9
Final exam: 0.91 4
100
= 40.4
9
Add these values to find the student's course score:

20.4 + 21.1 + 11.1 + 40.4 = 93.1
ANSWER KEY
DSST Business Math
27. The correct answer is B. Find the sum of the products of the ordered pairs, then divide by the sum of the
frequencies:
(5 6) + (4 5) + (3 8)
= 3.9
6+5+8
28. The correct answer is C. Find the sum of the products of the number pairs, and then divide by the sum
of the frequencies:
(4 40) + (3 50) + (5 30) + (2 70)
= $3.16
40 + 50 + 30 + 70
29. The correct answer is C. Find the sum of the products of the number pairs, and then divide by the sum
of the frequencies:
(8 30) + (9 25) + (10 20) + (13 20)
= $9.74
30 + 25 + 20 + 20
30. The correct answer is C. Factor the right-hand side:

y = (x + 4)(x 7)
Set each factor equal to zero, and then solve for x:
x+4=0
x = 4
x7 =0
x=7
The roots of the equation are 4 and 7.
31. The correct answer is A. Scoring in the 78th percentile means the grade of 78 is better than or equal to
78% of the test population. Subtract 78% from 1 to find the percent of students who scored higher than 70:
1 0.78 = 0.22, or 22%
32. The correct answer is A. The points that make the equation true are (0, 3), (2, 1), and (4, 5). Choice A is
the graph of the line containing these points.
nt
r
33. The correct answer is A. Use the compound interest formula A = P 1 + , where A is the final
n
amount, P is the principal, r is the rate, n is the yearly compoundings, and t is the time in years:
ANSWER KEY
DSST Business Math
15
0.0329
$20,000 = P 1 +
$20,000
=P
(1.0329 )5
$17,011.34 = P
1
34. The correct answer is B. Constant e is given by the limit lim 1 + . Therefore, as n approaches
n
n
infinity in A = P(1 + i)n, (1 + i)n approaches e and A approaches eP.
35. The correct answer is A. Substitute each value into the rate portion of the compound interest formula
nt
r
A = P 1 + and simplify to find the largest value.
n
1t
0.0315
t
Choice A: 1 +
= 1.0315
1
2t
0.031
t
Choice B: 1 +
= 1.03124
2
4t
0.0305
t
Choice C: 1 +
= 1.03085
4
12t
0.03
Choice D: 1 +
12
= 1.03042t
Choice A is the largest value, so it would maximize the interest.
36. The correct answer is D. Substitute the given values into the simple interest formula I = PRT and solve
for P:
9
$140.60 = P 0.05
12
P = $3,749.33
ANSWER KEY
DSST Business Math
37. The correct answer is B. Substitute the two sets of values into the simple interest formula I = PRT, and
then subtract to find the savings from prepaying. So:
Interest for 180 days:
I = $420 0.15
180
= $31.50
360
Interest for 120 days:

I = $420 0.15
120
= $21
360
The difference:
$31.50 $21 = $10.50
38. The correct answer is C. Subtract the original cost from the ending value, and then divide by the years in
use:
22,000 9,000
= $1,857.14
2009 2002
39. The correct answer is D. Find the difference between the original cost and the product of the usable
years and annual depreciation expense:
$100,000 (20 $4,000) = $20,000
40. The correct answer is A. Multiply the value at the beginning of a year by 1 minus 30% to find the next
year's beginning-of-year value.
At the start of Year 1, the value was $200,000.
Beginning value for Year 2: $200,000 0.7 = $140,000
41. The correct answer is C. Subtract the cost and salvage value, and then divide by usable years to find the
straight-line depreciation:
$3,500 $500
= $600
5
Divide the straight-line depreciation by the difference in cost and salvage value to find the straight-line
depreciation rate:
ANSWER KEY
DSST Business Math
$600
= 20%
$3,500 $500
Double the straight-line depreciation rate to get the declining-balance rate of 40%.
Multiply the cost by 1 minus the declining-balance rate to find the book value at the end of the first year:
$3,5000 (1 0.4) = $2,100
Multiply the first year-end value by 1 minus the declining-balance rate to find the book value at the end of the
second year:
$2,100 (1 0.4) = $1,260
42. The correct answer is B. Subtract the cost and salvage value, then divide by usable years to find the
straight-line depreciation:
$3,500 $500
= $600
5
Divide the straight-line depreciation by the difference in cost and salvage value to find the straight-line
depreciation rate:
$600
= 20%
$3,500 $500
Double the straight-line depreciation rate to get the declining-balance rate of 40%.
Multiply the cost by 1 minus the declining-balance rate to find the book value at the end of the first year:
$10,000 (1 0.4) = $6,000
Multiply the first year-end value by 1 minus the declining-balance rate to find the book value at the end of the
second year:
$6,000 (1 0.4) = $3,600
ANSWER KEY
DSST Business Math
43. The correct answer is C. Use the simple interest formula I = PRT to find the interest:
I = P 0.06
6
12
= 0.03P
Subtract the interest from the principal to find the proceeds of the loan:
P 0.03P = 0.97P
Divide the interest by the product of the proceeds and time to find the interest rate:
0.03P
6
0.97 P
12
0.03P
0.485P
= 6.2%
44. The correct answer is C. A simple discount note has the bank discount deducted in advance.
45. The correct answer is B. Substitute the original loan values into the following formulas:
Maturity Value Rate Time = Interest
$10,000 0.0725 1 = $725
Original Proceeds Rate Time = Interest
$10,725 0.12 0.5 = $643.50
Then:
($10,000 + $725) $843.50 = $10,081.50
46. The correct answer is D. The last day of the discount period is determined by the second number in the
terms column, or 10 days. Ten days from July 27, the date the goods were received, is August 6. The final
day the bill is due is the third number in the terms column, or 30 days after receipt of goods (ROG). Thirty
days from receipt of goods (July 27) is August 26.
47. The correct answer is B. The buyer can take the cash discount if he or she pays the invoice by the first
10 days of the next month, which is by March 10. The final due date of the bill is within 20 days of the end of
the discount period, which is March 30.
48. The correct answer is A. Multiply the unpaid months by the monthly installment to find the balance of
the outstanding loan:
16 $440 = $7,040
ANSWER KEY
DSST Business Math
Find the monthly principal payment:

$9, 000
24
= $375
Find the product of the months past the ninth payment and the difference between monthly installment
payment and the monthly principal payment to find the expected interest for the remaining payments:
15 ($440 $375) = $975
Subtract the balance of the outstanding loan and the expected interest for the remaining payments:
$7,040 $975 = $6,065
49. The correct answer is C. Substitute the given values into the interest formula: I = PRT:
$64,000 0.12
1
= $639.97
12
50. The correct answer is B. Substitute the given values into the interest formula, I = PRT:
$61,000 0.11
1
= $599.17
12
Then substitute the result value into the formula P I = A:

$693.57 $559.17 = $134.40
51. The correct answer is D. Substitute the given values into the following formulas:
Cash price Down payment = Amount Financed
$11,900 $199 = $11,701
Total of payment + Down payment = Deferred payment price
$11,940 + $199 = $12,139
ANSWER KEY
DSST Business Math
52. The correct answer is B. Multiply the remaining months by the monthly installment to find the balance
of the outstanding loan:
3 $150 = $450
Divide the price of the mower by 5 to find the monthly principal payment:
$650
5
= $130
Find the product of the remaining months and the difference between monthly installment payment and the
monthly principal payment to find the expected interest for the remaining payments:
2 ($150 $130) = $20
Subtract the expected interest for the remaining payments from the balance of the outstanding loan:
$450 $40 = $410
53. The correct answer is A. To find the selling price use the following formula:
Selling Price =
=
( Cost Markup Percentage )

( $50 45% ) + $50
+ Cost
= $72.50
54. The correct answer is B. Calculate the state income tax:

$250,000 0.0463 = $11,575
Subtract the amount of the state tax from the taxable income and multiply that amount by the federal tax rate
to find the federal tax:
$250,000 $11,575 = $238,425
$238,425 0.39 = $92,985.75
Divide the total of the taxes by the original annual taxable income to find the tax rate:
$11,575 + $92,985.75
= 0.418243, or 41.82%
$250,000
ANSWER KEY
DSST Business Math
55. The correct answer is D. Calculate the total tax credit for Year 1:
$300,000 0.02 = $6,000
Double the year 1 value to find year 2, double the year 2 value to find year 3, then add the totals:
$6,000 + $12,000 + $24,000 = $42,000
56. The correct answer is C. The company's taxable income increases by $2,000 because it sold the car for
more than its book value.
57. The correct answer is C. Substitute the given values into the formula:
C ( x ) = $25,000 + $70 x
= $25,000 + ($70 2,000)
= $165,000
then find the average cost per customer:
C ( x)
# of customers
$165,000
2, 000
= $83
58. The correct answer is A. Substitute the given values into the following formula:
Gross Pay = Amount per Item Items Stocked
= ( $0.30 500 ) + ( $0.50 500 ) + ( $0.60 200 )

= $150 + $250 + $120
= $520
59. The correct answer is C. Substitute the given values into the formula:
Gross Pay = Amount per Order Orders Delivered
= ( $3.00 60 ) + ( $3.50 40 ) + ( $4.50 40 )

= $180 + $140 + $180
= $500
ANSWER KEY
DSST Business Math
60. The correct answer is A. Substitute the given values into the formula:
Fixed Cost = Selling Price(Quanity) - Variable Cost (Quanity)
= ( $125 130 ) ( $97.50 130 )

= $16, 250 $12,675
= $3,575
61. The correct answer is D. Substitute the given values into the breakeven point formula:
Breakeven Point =
200 =
Fixed Cost
Selling Price - Variable Cost
$10, 000
$250 $200
Starting with 100 ticket sales in January and adding 30 sales per month (100 in January, 130 in February, 160
in March, etc.), May will be the first month the airline will have at least 200 passengers.
62. The correct answer is C. Solve for the manufacturer's suggested retail price:
$60
= $80
0.75
Then calculate production cost:
$80 50% = $40
Substitute the values into the breakeven point formula:
Breakeven Point =
$100, 000
$60 $40
Fixed Cost
= 5, 000
63. The correct answer is C. Substitute the given values into the contributing margin (CM) formula:
CM = Selling Price - Variable Cost
= $1.99 $0.74
= $1.25
Substitute the given values into the breakeven point formula:
ANSWER KEY
DSST Business Math
Breakeven Point =
Fixed Cost
$75, 000
$1.99 $0.74
= 60, 000
64. The correct answer is C. Substitute the given values into the breakeven point formula:
Breakeven Point =
=
Fixed Cost
Selling Prince - Variable Cost
$815, 000
$9.99 $3.50
= 125,577.78
65. The correct answer is A. Substitute the given values into the return on equity formula:
Net Earnings
Return on Equity =
Stockholders' Equity
147
427
= 0.3443, or 34.43%
66. The correct answer is B. Substitute the values into the current ratio formula:
Current Assets
Current Ratio =
Current Liabilities
$14, 000
$20,000
= 0.70, or 70%
67. The correct answer is A. Divide the net income for 2006 and 2007 by the net income for base year 2005:
2006:
2007:
$42, 000
$54, 000
$64, 000
$54, 000
= 0.777, or 78%
= 1.185, or 119%
ANSWER KEY
DSST Business Math
68. The correct answer is A. Divide the sales, gross profit, and net income for 2010 by the respective values
during base year 2009:
Sales:
$225, 000
$215, 000
Gross Profit:
Net Income:
= 1.0465, or 105%
$90, 000
$110, 000
$80, 000
$65, 000
= 0.818, or 82%
= 1.231, or 123%
69. The correct answer is C. Use this formula to find the profit margin of net sales:
Profit margin =
Net income
Net sales
$6, 000
$15, 000
= .40, or 40%
70. The correct answer is A. Graph A shows 5 people drink either 1 cup or less of coffee, 9 people drink 2
cups or less of coffee, 9 people drink 3 cups or less of coffee, 15 people drink 4 cups or less of coffee, and 18
people drink 5 cups or less of coffee.
71. The correct answer is B. Substitute the given values into the PE ratio formula and solve for dividends
paid per share and then solve where DPS is $6 and total shares is 1000:
Market Price
Earnings per Share
$150
$25 =
x
$6 = x
P/E =
$6 1,000 shares = $6,000
ANSWER KEY
DSST Business Math
72. The correct answer is A. First, substitute the given values into the P/E formula and solve:
Market Price
Earnings per Share
$20
$10 =
x
x = $2
P/E=
Knowing that earnings per share (EPS) is $2, substitute the value into the EPS formula, where EPS is $2 and
TSO is 1.5 million:
Annual Earnings = EPS TSO
= $2 1,500, 000
= $3, 000, 000
73. The correct answer is B. Substitute the values into the P/E ratio formula and solve where CP is $16 and
A/E is $2:
P/E =
=
Closing Price Per Share

Annual Earnings Per Share
$16
$2
=8
74. The correct answer is A. Substitute the values into the P/E ratio formula where CP is $93.64 and AE is
$5.48:
P/E =
Closing Price Per Share

Annual Earnings Per Share
$93.64
$5.48
= 17.09, or 17
Substitute the values into the stock yield formula where AD is 2.19 and AE is 93.64:
Yield =
Annual Dividend Per Share

Today's Closing Price Per Share
$2.19
$93.64
= 0.023, or 2.3%
ANSWER KEY
DSST Business Math
75. The correct answer is B.

1 1 1
1 0 0
23 21 22
1 1 23
1 0 21
1 0 22
x y s1 s2 z
1 1 1 0 0 23
1 0 0 1 0 21
1 0 0 0 1 22
x y s1 s2 z
R1 R2 0 1 1 1 0 2
1 0 0 1 0 21
R2 + R3 0 0 0 1 1 43
The minimization is z = 43.
76. The correct answer is B. Maximize z = 30x1 + 40x2, subject to 3x1 + 2x2
and x2 0:
x1
x2
s1
s2
2
1
1
-30 -40
1
0
0
x1
x2
R1 2 R2 1
1
40 R2 + R3 10
0
1
0
s1
0 60
0 24
1 0
1
0
s2
1 -2
0
1
0 40
The maximum profit is $960 when 24 N rings are produced.
z
0 12
0 24
1 960
60 and x1 + x2
24, with x1
ANSWER KEY
DSST Business Math
77. The correct answer is B. Maximize z = 8x1 + 12x2 + 24x3, subject to 20x1 + 30x2 + 40x3
12x1 + 21x2 + 16x3 42,000, with x1 0, x2 0, and x3 0.
x1
x2
x3
s1
s2
20
30
40
1
0
0
12 21 16
-8 -12 -24
x1
x3
z
0 91,800
0 42, 000
1
0
s1
s2
20 30 40 1
45 0 -2
30 0 3
0
5
( - R1 + 5R2 ) 20
( 3R1 + 5R3 ) 20
x2
91,800 and
z
0 91,800
0 26, 400
5 275, 400
It follows that x1 = 0, x2 = 0, and x3 = 2,295 where x3 is the number of ten-speed bikes needed to maximize
profits. Multiply x3 = 2,295 by the respective profit per unit:
$2,295 $24 = $55,080
ANSWER KEY
DSST Business Math
78. The correct answer is C.

1 1 100
3 4 350
3 2 0
1
3 3
4 2
1
100 350 0
x1
x2 s1 s2 z
3 1 0 0 3
1
1
4 0 1 0 2
100 350 0 0 1 0
x1 x2 s1
s2 z
4 R1 3R2 1 0 4 3 0 6
1 4 0
1 0 2
175 R2 + 2 R3 25 0 0 175 2 350

x1 x2 s1
s2 z
R1 R2 0 4 4 4 0 4
1
4 0
1 0 2
25 R2 + R3 0 100 0 200 2 400

The minimization is z = 400.
79. The correct answer is C. Add the amounts in the portion to principal column:
$81.24 + $82.05 + $82.87 = $246.16
ANSWER KEY
DSST Business Math
80. The correct answer is B. Substitute the given values into the present value formula where FV is
$2,000,000, i is 6%, and n is 5:
-n
PV = FV (1 + i )
= $2, 000, 000 (1 + 0.06 )
-5
= $1, 495,516.35
= $1, 495, 000
81. The correct answer is A. Substitute the given values into the formula where F is $1,000,000, i is 4.5%,
and n is 24:
A=
Fi
(1 + i )n 1
$1, 000, 000 ( 0.045 )
(1 + 0.045 )24 1
= $23,987.03
= $24, 000
82. The correct answer is A. Substitute the given values into the future value for lump sum formula, where
FV is future value and PV is present value. Solve the two equations and find the difference between the
results.
For account A, where i is 5%, PV is $1,000, and n is 365:
FV = PV (1 + i )
n
365
= $1, 000 (1 + 0.05 )
$1, 000 (1 + 0.025 )
= $1, 051.27
For account B, where i is 5%, PV is $1,000, and n is 2:
FV = PV (1 + i )
n
2
= 1, 000 (1 + 0.05 ) 1,000 (1 + 0.025 )

= $1, 050.63
Subtract to find the difference between the accounts:
$1,051.27 $1,050.63 = $0.64
ANSWER KEY
DSST Business Math
83. The correct answer is C. Substitute the given values into the annual percentage rate formula r =
I
Pt
where I is $20,000, P is $250,000, and t is 6:

$20, 000
$250, 000 6
= 0.013333, or 13.33%
nt
r
84. The correct answer is D. Use the compound interest formula to solve A = P 1 + where P is
n
principal, r is the rate, n is the number of yearly compounding, and t is the number of years. Set 0.8 equal to
the ratio of the actual balance and the possible balance with a consistent rate:
72
r
r
x 1 + 1 1 + 2
12 12
0.8 =
120
r
x 1 + 1
12
48
48
r2
1 +
12
0.8 =
48
r1
1
+
12
r2
48
12
0.8 =
r
1+ 1
12
1+
48
12
r
r
0.8 + 48 0.8 1 1 = 2
12
12
( 48 0.8 ) + r1 ( 48 0.8 ) 12 = r2
r1
( 48 0.8 ) + 12 ( 48 0.8 1) = r2
0.995r1 0.0556564 = r2
Since 0.995 r1 is about r1, the difference between r1 and r2 is about 0.0556564 5.57%.
ANSWER KEY
DSST Business Math
85. The correct answer is B. Substitute the given values into the bank discount formula to calculate interest
being paid:
Bank Discount = Maturity Value Discount Rate Time
5
= $25,000 0.13
12
= $1,354.17
Substitute the values into EF =
, where I is $1,354.17, P is 23,645.83, and T is 5 :

12
PT
EF =
I
PT
$1,354.17
$23, 645.83 0.41667
= 13.7%
n
i
86. The correct answer is C. Substitute the given values into the formula 1 + 1, where i is 12% and n
n
is 12:
12
.01
1 + 1 = 12.68%
12
n
i
87. The correct answer is D. Substitute the given values into the formula 1 + 1, where i is 8% and n is
n
4:
4
.08
1+
1 = 8.24%
4
88. The correct answer is C. Substitute the given values into the formula for each bank 1 + 1 and
n
compare.
12
0.0806
Bank A: 1 +
1 = 8.365%
12
0.0812
Bank B: 1 +
1 = 8.371%
4
ANSWER KEY
DSST Business Math
0.0825
Bank C: 1 +
1 = 8.420%
2
0.0835
Bank D: 1 +
1 = 8.35%
1
89. The correct answer is D. Graph D shows no fee for luggage weighing up to 40 pounds, a flat fee of $50
for luggage weighing between 40 and 80 pounds, then an additional fee of $1.25 per pound for luggage
weighing more than 80 pounds.
90. The correct answer is C. Substitute the given values into formula and solve where x is $30,000:
T ( x ) = 0.1x $1, 000
= ( 0.1 $30, 000 ) $1, 000
= $2, 000
91. The correct answer is A. Substitute the given values into formula and solve where x is 10:
P ( x ) = 0.4 x 2 + 12 x 15
2
= 0.4 (10 ) + 12 (10 ) 15

= $65,000
92. The correct answer is D.

($35.75 2) + ($25 3) + ($10.60 1) = $157.10
93. The correct answer is A. Substitute the given values into the present value of non-annual compounding
formula where i is 5%, PMT is $120, m is 12, and Y is 4
mY

i
1 1 +
PV = PMT
48
1 (1.0033 )
= $120
0.0033
= $5,318.87
94. The correct answer is C. Substitute the given values into the future value for lump sum formula where i
is 7%, PV is $10,000, and n is 7:
ANSWER KEY
DSST Business Math
FV = PV (1 + i )
= $10, 000 (1 + 0.07 )
= $16, 057.81
95. The correct answer is B. Substitute the given values into the future value for lump sum formula where i1
is 7%, PV1 is $15,000, n1 is 5, i2 is 7%, PV2 is $7,000, and n2 is 3:
n
FV = PV1 (1 + i1 ) 1 + PV2 (1 + i2 )
n2
5
3
= $15, 000 (1 + 0.07 ) + $7, 000 (1 + 0.07 )
= $29, 613.58
96. The correct answer is C. Substitute the given values into the future value for lump sum formula and
subtract the present value where i is
0.06
2
, PV is $10,000, and n is 8:
n
FV = PV (1 + i ) PV
8
= $10, 000 (1 + 0.03) $10, 000

= $2, 667.70
97. The correct answer is B. Substitute the given values into the future value for lump sum formula and
solve where i is
0.08
4
, PMT is $300, and n is 8:

(1 + i )n 1
8
(1 + 0.02 ) -1
= $300
0.02
FV = PMT
$2,574.89
ANSWER KEY
DSST Business Math
98. The correct answer is C. Substitute the given values into the effective annual rate formula , where i is
9% and n is 12:
n
i
1 + 1
n
12
0.09
1 +
1 = 9.381%
12
99. The correct answer is C. Substitute the given values into the effective annual rate formula, where i is
1.5% and n is 365:
n
i
1 + 1
n
365
0.015
1 +
365
1 = 1.511%
100. The correct answer is B. Substitute the given values into the annual percentage rate formula, where I is
$500, P is $1000, and t is 3:
r=
Pt
$500
$1, 000 ( 3)
= 16.67%

Ds ST Business Math

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DSST

Introduction to Business Math

Each incomplete statement is followed by four suggested

is equivalent to which of the following?

*DSST is a registered trademark of Prometric, which was not involved in the