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Friday, June 23, 2023

CFAT Practice Test Questions with Answers in PROBLEM SOLVING ps011

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1. An Ontario real estate agent received a $44,670 commission for selling a single detached home. His commission was 3% of the selling price. Calculate the selling price of the home. 


A. $1,489,000

B. $1,498,000

C. $1,849,000

D. $1,894,000


Answer:  A


Solution: 


Let 

S = selling price of the home


c = commission 


r = commission rate 



c = S * r



Given:

c = $44,670


r = 3%


substituting the given into the formula, 


c = S * r


44,670 = S * 3%

44,670 = S * 0.03

S = 44,670/0.03

S = $1,489,000




2. A motorcycle parts retailer's monthly total purchase on parts is $210,000. Monthly transportation costs are $3,000. Utilities costs $600 per month. Employee payroll costs are $17,000 monthly. Loan payments are $5,000 a month. Monthly rent is $6,000. Insurance cost is $500 a month. Maintenance cost and reserve fund expense is $3,000 per month. If the store owner's monthly sales revenue is $320,400, what is his monthly profit margin before taxes?


a. 25.3%

b. 23.5%  --- answer 

c. 32.5%

d. 24.3%


Solution: 


step 1: 

calculate total monthly expenses 


Total monthly expenses 

= 210,000  + 

        3,000  + 

           600  + 

      17,000  + 

        5,000  + 

        6,000  + 

           500  + 

        3,000 

--------------------------

  $245,100

  


step 2: 

calculate net income (profit) before taxes


= Total monthly sales revenue minus Total monthly expenses 


Net income (profit) before taxes 


= 320,400 - 245,100 


= $75,300



step 3:

calculate net profit margin before taxes


= (Net income before taxes

divided by Total monthly sales revenue) x 100%


= (75,300/320,400) 

    x 100%


= 23.5%

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Friday, June 16, 2023

CFAT Practice Test Questions with Answers in PROBLEM SOLVING ps010

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1. Francis and his parents went for a long drive on a long weekend using two different cars. Francis drove at 95 km/hr and his parents at 85 km/hr. Assuming no traffic and Francis and his parents starting at the same time and the same location using the same route, how far apart are they after 3 hours?


a. 25 km

b. 30 km  --- answer 

c. 35 km

d. 40 km


Solution:


S = v * t 


where: 

S = distance 

v = velocity (speed) 

t = time of travel


solving for their distances after 3 hours, 


Francis 

S = v * t 

S = 95 km/hr  *  3 hr 

S = 285 km


Parents 

S = v * t 

S = 85 km/hr  *  3 hr 

S = 255 km


Distance apart 

= 285 - 255 

= 30 km




2. A certain lemonade juice mixture contains 0.25 ml of lemon juice and 6 grams of sugar for every cup of water. If 16 cups of water is to be used, how much lemon juice and sugar is to be added to the mixture?


A. 3 ml & 92 grams

B. 3 ml & 86 grams

C. 4 ml & 69 grams 

D. 4 ml & 96 grams

       D --- answer 


Solution: 


step1: 

determine the original proportions of the mixture 


1 : 0.25 : 6


1 cup of water 

0.25 ml lemon juice

6 grams of sugar



step2: 

determine the total amount of water needed, in order to get the multiplier 


total water (given)

= 16 cups


multiplier = 16



step3:

use the multiplier in step2 to solve for the total amount of lemon juice and sugar needed 


from the original proportions, 


1 : 0.25 : 6 


1 cup of water 

0.25 ml lemon juice

6 grams of sugar



total lemon juice

= 0.25 x 16

= 4 ml


total sugar 

= 6 x 16 

= 96 grams


Answer:

4 ml & 96 grams


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Friday, June 9, 2023

CFAT Practice Test Questions with Answers in PROBLEM SOLVING ps009

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1. A student worked during the summer and earned $5,000. He invests his earnings in a 2-yr term deposit that pays 3% per year. What is the value of his investment at the end of the term?


a. $5,403.5

b. $5,504.5

c. $5,304.5 - answer 

d. $5,305.4


Solution:

The rate in this problem is compound interest, meaning that the interest earned at the end of the first year will be added to the principal.


$5,000 = initial investment 

2-yr  = term 

3%/yr = interest rate


step1: 

solve for the Interest earned at the end of the first year


Interest at year 1

= $5,000 x 3%

= $5,000 x 0.03

= $150



step2: 

add the Interest at year 1 to the initial investment 


Principal at year 1 

= $5,000 + $150 

= $5,150



step3: 

solve for the Interest at the end of the second year


Interest at year 2

= $5,150 x 3%

= $5,150 x 0.03

= $154.5



step4: 

add the Principal at year 1 to the Interest at year 2


Total amount at the end of the term

= $5,150 + $154.5

= $5,304.5




2. Jaden is 6 years older than his sister Florence.  Next year,  Jaden will be twice as old as Florence.  Solve for their ages now.


a. 14, 8

b. 13, 7

c. 11, 5  --- answer 

d. 12, 6


Solution: 


let 

J = Jaden's age now

F =  Florence's age now


equation1: 

their ages now


J = 6 + F



equation2: 

their ages 1 year from now


J + 1 = 2 (F + 1) 



substitute the value of J in equation1 into equation2 


(6 + F) + 1 = 2 (F + 1)

6 + F + 1 = 2F + 2 

7 - 2 = 2F - F

5 = F

F = 5



solve for J in equation1 using the value of F = 5


J = 6 + F 

J = 6 + 5 

J = 11


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Friday, June 2, 2023

CFAT Practice Test Questions with Answers in PROBLEM SOLVING ps008

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1. Paul is on the 25th floor of a high-rise building when the time was 6:25. 

If it takes him 12 seconds to go down per floor, what will be the time when he arrives at the ground floor?


a. 6:29

b: 6:30  --- answer 

c. 6:31

d. 6:32


Solution:


step 1: 

multiply number of floors by time going down per floor 


total time 

= 25 x 12

= 300 seconds


step 2:

divide total time by 60 to convert in minutes 


minutes 

= 300/60 

= 5 minutes


step 3:

add 5 minutes to the time when Paul was at the top floor 


time at ground floor

= 6:25 + 5 minutes 

= 6:30 




2. What is the next number in the series?


279, 186, ____, 82.67


a. 93

b. 165

c. 142

d. 124  --- answer 


Solution: 

Divide by 1.5 to get the next number 


279/1.5 = 186

186/1.5 = 124

124/1.5 = 82.67




3. Calculate the value of the unknown. 


30% x = 1080 * 1/72


a. 15

b. 45

c. 50  --- answer 

d. 30


Solution: 


30% x = 1080 * 1/72

0.3x = 15

x = 15/0.3 

x = 50




4. On his first week, Adam worked 40 hours from Monday to Friday. On Saturday, he worked overtime for an extra 20% of his hours. On his second week, he worked 43 hours with no overtime. How many hours did he work in total?


a. 84

b. 83

c. 91  ---  answer 

d. 90


Solution: 


first week hours

= 40 + 20% (40)

= 40 + 8

= 48


second week hours 

= 43 


total hours

= 48 + 43 

= 91 




5. What is the correct value of y? 


0.8 - y + 34 = y - 0.9


a. 18.75

b. 18.57

c. 17.58

d. 17.85  --- answer 


Solution: 


0.8 - y + 34 = y - 0.9


0.8 + 0.9 + 34 = y + y

35.7 = 2y 

y = 35.7/2

y = 17.85


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