Bill makes $100,000 and must pay 6% income taxes. Bob, on the other hand, makes $40,000 and must pay 2% income taxes. Bill and Bob most likely live a country with .

A. progressive taxes
B. regressive taxes
C. proportional taxes
D. sales taxes

Marsha has a credit card and every month she charges $200, but only makes a $50 payment. Every month, the amount of interest that she is paying continues to grow. Marsha’s card most likely has interest.

A. proportional
B. simple
C. executive
D. compound

An advantage to investing in a mutual fund is __.

A. a loss in one stock means a total loss of investment
B. a gain in one stock or bond means a loss in another stock or bond
C. a loss in one stock means only a partial loss of the entire investment
D. none of these; A mutual fund is not for investments.

Explanation: Proportional taxes are taxes that an individual or family pays at a fixed rate on their income. Bill and Bob most likely live in a country with proportional taxes because the tax rates are based on their income level.  

Answer: Marsha’s card most likely has D. compound interest.

Explanation:  Compound interest is interest that keeps adding on to the initial balance and interest. The simple way to describe compound interest is interest added on to interest because Marsha is not paying off the full amount and is adding more on each month.  

Answer: An advantage to investing in a mutual fund is C. a loss in one stock means only a partial loss of the entire investment.

Explanation: A mutual fund is an investment pool that is managed by a professional where many investors are able to purchase funds/securities that they want. There are advantages and disadvantages like any investment however when you lose some money with a mutual investment, you won’t lose it all.