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DSST Business Mathematics study materials
DSST Business Mathematics study resources

DSST Business Mathematics practice questions

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Question 1Integers, fractions, decimals, round numbers, ratios, averages, business graphs

A retail buyer purchases 240 units of a product at $18.50 each and sells all of them at $27.75 each. What is the total gross profit on the purchase?

  1. $2,460.00
  2. $4,080.00
  3. $2,220.00 Correct answer.
  4. $1,860.00

Explanation

Gross profit per unit is the selling price minus the cost: $27.75 − $18.50 = $9.25. Multiply by 240 units to get $9.25 × 240 = $2,220.00. Alternatively, total revenue $6,660 minus total cost $4,440 gives the same result.

Question 2Integers, fractions, decimals, round numbers, ratios, averages, business graphs

A company's monthly sales for four months were $42,000, $38,500, $45,200, and $50,300. What is the average monthly sales figure?

  1. $43,000
  2. $44,000 Correct answer.
  3. $45,500
  4. $42,750

Explanation

Add the four monthly figures to get $176,000, then divide by the number of months, 4. The average is $176,000 ÷ 4 = $44,000. Averages always divide the total by the count of items, not by a weighted or rounded figure.

Question 3Integers, fractions, decimals, round numbers, ratios, averages, business graphs

Express the fraction 3/8 as a decimal.

  1. 0.267
  2. 0.375 Correct answer.
  3. 0.83
  4. 0.38

Explanation

Divide the numerator by the denominator: 3 ÷ 8 = 0.375. The decimal terminates after three places. Rounding to 0.38 changes the exact value, so the precise decimal is 0.375.

Question 4Integers, fractions, decimals, round numbers, ratios, averages, business graphs

A business ratio of current assets to current liabilities is 3:2. If current liabilities are $84,000, what are the current assets?

  1. $168,000
  2. $56,000
  3. $126,000 Correct answer.
  4. $42,000

Explanation

The ratio 3:2 means assets are 3 parts for every 2 parts of liabilities. Each part equals $84,000 ÷ 2 = $42,000, so assets are 3 × $42,000 = $126,000. Setting up the proportion 3/2 = x/84,000 gives the same answer.

Question 5Integers, fractions, decimals, round numbers, ratios, averages, business graphs

Round the number 47,382 to the nearest thousand.

  1. 50,000
  2. 48,000
  3. 47,400
  4. 47,000 Correct answer.

Explanation

To round to the nearest thousand, look at the hundreds digit, which is 3. Because 3 is less than 5, the thousands digit stays the same and the remaining digits become zeros, giving 47,000.

Question 6Integers, fractions, decimals, round numbers, ratios, averages, business graphs

A store marks up the cost of an item by 40% and then offers a 25% discount on the marked-up price. If the original cost is $80, what is the final selling price?

  1. $80
  2. $84 Correct answer.
  3. $92
  4. $78

Explanation

The marked-up price is $80 × 1.40 = $112. Applying a 25% discount multiplies by 0.75, giving $112 × 0.75 = $84. The combined factor is 1.40 × 0.75 = 1.05, so the final price is 5% above cost.

Question 7Integers, fractions, decimals, round numbers, ratios, averages, business graphs

A firm's total fixed costs are $18,000 per month. Each unit sells for $25 and has variable cost of $15. How many units must be sold to break even?

  1. 1,200 units
  2. 2,400 units
  3. 720 units
  4. 1,800 units Correct answer.

Explanation

Break-even units equal fixed costs divided by the contribution margin per unit. The contribution margin is $25 − $15 = $10, so $18,000 ÷ $10 = 1,800 units. At that volume total contribution equals total fixed costs.

Question 8Integers, fractions, decimals, round numbers, ratios, averages, business graphs

A line graph shows a company's revenue rising from $120,000 in year 1 to $150,000 in year 2. What is the percentage increase?

  1. 25% Correct answer.
  2. 16.7%
  3. 30%
  4. 20%

Explanation

Percentage change equals the change divided by the original value. The change is $150,000 − $120,000 = $30,000, and $30,000 ÷ $120,000 = 0.25, or 25%. The base for the percentage is the earlier figure.

Question 9Integers, fractions, decimals, round numbers, ratios, averages, business graphs

Simplify the expression and give the result as a decimal: (0.6 × 0.25) + (0.4 × 0.75).

  1. 0.55
  2. 0.35
  3. 0.45 Correct answer.
  4. 0.60

Explanation

Compute each product first: 0.6 × 0.25 = 0.15 and 0.4 × 0.75 = 0.30. Adding them gives 0.15 + 0.30 = 0.45. This kind of weighted sum is common when blending two price or rate figures.

Question 10Integers, fractions, decimals, round numbers, ratios, averages, business graphs

A company reported net income of $96,000 on total sales of $1,200,000. Express the net income as a percentage of sales.

  1. 8% Correct answer.
  2. 6%
  3. 10.5%
  4. 12%

Explanation

Divide net income by total sales: $96,000 ÷ $1,200,000 = 0.08. Multiplying by 100 gives 8%. This ratio is the net profit margin, a standard measure of profitability relative to revenue.

Question 11Integers, fractions, decimals, round numbers, ratios, averages, business graphs

A worker earns $14.75 per hour and works 38.5 hours in a week. What is the gross pay for the week?

  1. $567.88 Correct answer.
  2. $567.875
  3. $566.50
  4. $568.00

Explanation

Multiply the hourly rate by hours worked: $14.75 × 38.5 = $567.875. Money is rounded to the nearest cent, giving $567.88 because the third decimal is 5. Exact intermediate values are kept until the final rounding.

Question 12Integers, fractions, decimals, round numbers, ratios, averages, business graphs

In a pie chart, one sector represents $54,000 of a total of $360,000. What central angle should that sector have?

  1. 36 degrees
  2. 45 degrees
  3. 60 degrees
  4. 54 degrees Correct answer.

Explanation

The sector's share is $54,000 ÷ $360,000 = 0.15, or 15%. A full circle is 360 degrees, so the angle is 0.15 × 360 = 54 degrees. Pie chart sectors are proportional to their share of the whole.

Question 13Integers, fractions, decimals, round numbers, ratios, averages, business graphs

A quantity increases from 250 to 300. What is the percentage increase?

  1. 25%
  2. 20% Correct answer.
  3. 50%
  4. 16.7%

Explanation

The increase is 300 − 250 = 50. Divide the increase by the original value: 50 ÷ 250 = 0.20, or 20%. The original value, not the new value, is always the base for a percentage increase.

Question 14Integers, fractions, decimals, round numbers, ratios, averages, business graphs

A firm's sales for five consecutive quarters are $20,000, $24,000, $22,000, $26,000, and $28,000. What is the median quarterly sales figure?

  1. $26,000
  2. $22,000
  3. $23,000
  4. $24,000 Correct answer.

Explanation

Arrange the values in order: $20,000, $22,000, $24,000, $26,000, $28,000. With five values, the median is the middle one, which is $24,000. The median is unaffected by extreme values and differs from the mean.

Question 15Integers, fractions, decimals, round numbers, ratios, averages, business graphs

Convert 0.045 to a fraction in lowest terms.

  1. 45/100
  2. 9/20
  3. 9/200 Correct answer.
  4. 45/1000

Explanation

Write 0.045 as 45/1000, then divide numerator and denominator by their greatest common divisor, 5, giving 9/200. The fraction is now in lowest terms because 9 and 200 share no common factor.

Question 16Integers, fractions, decimals, round numbers, ratios, averages, business graphs

A partnership divides profit in the ratio 5:3:2 among three partners. If total profit is $240,000, how much does the partner with the largest share receive?

  1. $72,000
  2. $120,000 Correct answer.
  3. $48,000
  4. $100,000

Explanation

The ratio has 5 + 3 + 2 = 10 total parts. Each part is $240,000 ÷ 10 = $24,000, and the largest share of 5 parts is 5 × $24,000 = $120,000. Always sum the ratio terms before allocating.

Question 17Integers, fractions, decimals, round numbers, ratios, averages, business graphs

Round 6.8475 to three decimal places.

  1. 6.847
  2. 6.8485
  3. 6.848 Correct answer.
  4. 6.85

Explanation

The fourth decimal digit is 5, so the third decimal place rounds up from 7 to 8, giving 6.848. When rounding to three decimal places, only the fourth digit determines whether the third increases.

Question 18Integers, fractions, decimals, round numbers, ratios, averages, business graphs

A bar chart shows four product lines with sales of $15,000, $22,500, $18,000, and $19,500. What percentage of total sales does the largest product line represent?

  1. 20%
  2. 25% Correct answer.
  3. 30%
  4. 33%

Explanation

Total sales are $15,000 + $22,500 + $18,000 + $19,500 = $75,000. The largest line is $22,500, and $22,500 ÷ $75,000 = 0.30, or 30%. The percentage is the largest line divided by the total.

Question 19Integers, fractions, decimals, round numbers, ratios, averages, business graphs

A company's sales were $80,000 in year 1 and $68,000 in year 2. What is the percentage decrease?

  1. 12%
  2. 20%
  3. 15% Correct answer.
  4. 17.6%

Explanation

The decrease is $80,000 − $68,000 = $12,000. Divide by the original value: $12,000 ÷ $80,000 = 0.15, or 15%. Percentage decreases always use the earlier, larger value as the base.

Question 20Integers, fractions, decimals, round numbers, ratios, averages, business graphs

A firm's average monthly sales over the first half of the year were $50,000. If sales in the first five months totaled $240,000, what were sales in the sixth month?

  1. $50,000
  2. $48,000
  3. $55,000
  4. $60,000 Correct answer.

Explanation

Average sales of $50,000 over six months imply total sales of $50,000 × 6 = $300,000. Subtracting the first five months of $240,000 leaves $60,000 for the sixth month. Work backward from the average to find the missing value.

Question 21Integers, fractions, decimals, round numbers, ratios, averages, business graphs

A company's cost of goods sold is $180,000 and its average inventory is $45,000. What is the inventory turnover ratio, expressed as a decimal?

  1. 4.5
  2. 4.0 Correct answer.
  3. 2.5
  4. 3.5

Explanation

Inventory turnover equals cost of goods sold divided by average inventory: $180,000 ÷ $45,000 = 4.0. This means inventory is sold and replaced four times during the period. The ratio is a pure number with no units.

Question 22Integers, fractions, decimals, round numbers, ratios, averages, business graphs

A price is increased by 20% and then the new price is decreased by 20%. Compared with the original price, the final price is:

  1. 4% higher
  2. 4% lower Correct answer.
  3. the same
  4. 2% lower

Explanation

The combined factor is 1.20 × 0.80 = 0.96, so the final price is 96% of the original, which is 4% lower. The two percentage changes apply to different bases, so they do not cancel. This is a common trap in markup and discount problems.

Question 23Integers, fractions, decimals, round numbers, ratios, averages, business graphs

A firm has fixed costs of $60,000, a selling price of $40 per unit, and variable cost of $25 per unit. How many units must it sell to earn a target profit of $30,000?

  1. 2,000 units
  2. 6,000 units Correct answer.
  3. 4,000 units
  4. 7,500 units

Explanation

Target units equal fixed costs plus target profit, divided by the contribution margin. The margin is $40 − $25 = $15, so ($60,000 + $30,000) ÷ $15 = 6,000 units. Include the profit goal in the numerator alongside fixed costs.

Question 24Integers, fractions, decimals, round numbers, ratios, averages, business graphs

A company's gross profit margin was 30% on sales of $500,000. If cost of goods sold then rises by $25,000 with sales unchanged, what is the new gross profit margin?

  1. 20%
  2. 28%
  3. 27%
  4. 25% Correct answer.

Explanation

Original gross profit is 30% of $500,000 = $150,000, so cost of goods sold is $350,000. After a $25,000 rise, cost becomes $375,000 and gross profit falls to $125,000. Dividing $125,000 by $500,000 gives a new margin of 25%.

Question 25Integers, fractions, decimals, round numbers, ratios, averages, business graphs

A firm's sales grew 10% in year 1 and 20% in year 2. What single percentage growth over the two years is equivalent to these successive increases?

  1. 32% Correct answer.
  2. 40%
  3. 22%
  4. 30%

Explanation

Successive percentage changes multiply: 1.10 × 1.20 = 1.32, which corresponds to a 32% total increase. Simply adding 10% and 20% ignores compounding on the first year's growth. This compounding principle applies to any chain of percentage changes.

Question 26Integers, fractions, decimals, round numbers, ratios, averages, business graphs

A supplier's invoice lists a unit cost of $3.60 per item when 500 items are ordered. If the buyer orders 1,250 items at the same unit cost, what is the total cost?

  1. $4,320.00
  2. $4,250.00
  3. $4,500.00 Correct answer.
  4. $4,680.00

Explanation

Multiply the unit cost by the quantity: 3.60 × 1,250. Since 3.6 × 1,000 = 3,600 and 3.6 × 250 = 900, the total is $4,500.00.

Question 27Integers, fractions, decimals, round numbers, ratios, averages, business graphs

A bookkeeper records three expense amounts: 2/5 of a budget, 1/4 of the budget, and 1/10 of the budget. What fraction of the budget remains unspent?

  1. 3/10
  2. 1/4 Correct answer.
  3. 2/5
  4. 1/3

Explanation

Convert to twentieths: 2/5 = 8/20, 1/4 = 5/20, and 1/10 = 2/20, so spending totals 15/20 = 3/4. The unspent share is 1 − 3/4 = 1/4 of the budget.

Question 28Integers, fractions, decimals, round numbers, ratios, averages, business graphs

A delivery van's odometer reads 47,860 miles at the start of a month and 51,235 miles at the end. What is the monthly mileage rounded to the nearest hundred miles?

  1. 3,400 miles
  2. 3,300 miles Correct answer.
  3. 3,500 miles
  4. 3,375 miles

Explanation

Subtract the starting reading from the ending reading: 51,235 − 47,860 = 3,375 miles. Rounding to the nearest hundred looks at the tens digit 7, which rounds the hundreds digit up, giving 3,400? No - 3,375 rounds to 3,400 only if the tens digit is 5 or more; here the value is 3,375, so the nearest hundred is 3,400.

Question 29Integers, fractions, decimals, round numbers, ratios, averages, business graphs

A retailer's average daily sales over a 30-day month were $4,250. If average daily sales were $4,250 for the first 20 days and $4,900 for the remaining 10 days, what were total sales for the month?

  1. $132,000
  2. $127,500
  3. $134,500 Correct answer.
  4. $136,000

Explanation

Total sales equal the sum of each period: 20 × 4,250 = 85,000 and 10 × 4,900 = 49,000. Adding gives 85,000 + 49,000 = $134,500.

Question 30Integers, fractions, decimals, round numbers, ratios, averages, business graphs

A company's debt-to-equity ratio is 3:5. If total equity is $420,000, what is total debt?

  1. $840,000
  2. $168,000
  3. $252,000 Correct answer.
  4. $700,000

Explanation

Set up the proportion 3/5 = debt/420,000. Cross-multiplying gives debt = 3 × 420,000 ÷ 5 = $252,000.

Question 31Integers, fractions, decimals, round numbers, ratios, averages, business graphs

A line graph plots a firm's quarterly revenue: Q1 $48,000, Q2 $52,000, Q3 $60,000, Q4 $64,000. What is the mean quarterly revenue, and how does it compare with the median?

  1. Mean $54,000; mean equals median
  2. Mean $56,000; mean equals median
  3. Mean $58,000; mean exceeds median
  4. Mean $56,000; mean exceeds median Correct answer.

Explanation

The mean is (48,000 + 52,000 + 60,000 + 64,000) ÷ 4 = 224,000 ÷ 4 = $56,000. The median is the average of the two middle values, (52,000 + 60,000) ÷ 2 = $56,000, so the mean equals the median.

Question 32Integers, fractions, decimals, round numbers, ratios, averages, business graphs

A pie chart allocates a marketing budget of $72,000 among three channels in the ratio 2:3:4. What central angle, to the nearest degree, represents the largest channel?

  1. 90°
  2. 80°
  3. 120°
  4. 160° Correct answer.

Explanation

The largest channel's share is 4/9 of the budget. As a fraction of the full circle, 4/9 × 360° = 160°.

Question 33Integers, fractions, decimals, round numbers, ratios, averages, business graphs

A firm's revenue falls from $250,000 to $200,000, then rises back to $250,000. What is the net percentage change over the two moves, and why is it not zero?

  1. −20%, because the drop is measured from the higher base
  2. +4%, because the recovery exceeds the decline
  3. 0%, because the endpoints are equal Correct answer.
  4. −4%, because the 20% drop outweighs the 25% gain

Explanation

A 20% decline from $250,000 gives $200,000, and a 25% increase on $200,000 returns the figure to $250,000. Because the ending value equals the starting value, the net change is 0%, even though the two percentage moves differ in size.

Question 34Integers, fractions, decimals, round numbers, ratios, averages, business graphs

A company reports sales of $1,500,000, cost of goods sold of $900,000, and operating expenses of $450,000. Express operating profit as a percentage of sales and state the ratio of gross profit to operating expenses in lowest terms.

  1. 7% and 4:3 Correct answer.
  2. 10% and 3:2
  3. 4% and 3:4
  4. 7.5% and 2:3

Explanation

Gross profit is 1,500,000 − 900,000 = $600,000, and operating profit is 600,000 − 450,000 = $150,000. As a percentage of sales that is 150,000 ÷ 1,500,000 = 10%? No - 150,000/1,500,000 = 0.10, so the profit margin is 10%, and the ratio 600,000:450,000 reduces to 4:3.

Question 35Simple interest, compound interest, annuities

A business deposits $8,000 in an account that pays 6% simple interest per year. How much interest accrues over 9 months?

  1. $480
  2. $540
  3. $720
  4. $360 Correct answer.

Explanation

Simple interest equals principal times annual rate times time in years. Nine months is 0.75 year, so interest is 8,000 × 0.06 × 0.75 = $360.

Question 36Simple interest, compound interest, annuities

Which statement correctly describes the difference between simple and compound interest on the same principal at the same nominal annual rate?

  1. Simple interest grows each period on principal plus prior interest
  2. Compound interest credits interest on accumulated interest as well as principal Correct answer.
  3. Compound interest applies only when the term exceeds ten years
  4. Simple interest always produces a larger balance over time

Explanation

Compound interest adds earned interest to the balance so later periods earn interest on interest. Simple interest is computed only on the original principal for the whole term.

Question 37Simple interest, compound interest, annuities

An investment earns interest compounded quarterly at a nominal annual rate of 8%. What periodic interest rate is applied each quarter?

  1. 4.00%
  2. 8.00%
  3. 0.67%
  4. 2.00% Correct answer.

Explanation

For quarterly compounding the nominal annual rate is divided by four periods per year. Thus 8% ÷ 4 = 2% per quarter.

Question 38Simple interest, compound interest, annuities

A firm borrows $5,000 for 2 years at 7% simple interest. What total amount must be repaid at maturity?

  1. $5,350
  2. $5,700.45
  3. $5,700 Correct answer.
  4. $6,050

Explanation

Simple interest is 5,000 × 0.07 × 2 = $700. Adding interest to principal gives a maturity value of $5,700.

Question 39Simple interest, compound interest, annuities

In an ordinary annuity, when are the payments assumed to occur?

  1. At the beginning of each period
  2. Only at the final maturity date
  3. Continuously throughout each period
  4. At the end of each period Correct answer.

Explanation

An ordinary annuity, also called an annuity-immediate, places each payment at the end of its period. An annuity due instead places payments at the beginning of each period.

Question 40Simple interest, compound interest, annuities

What does the future value of an ordinary annuity represent?

  1. The sum of all payments plus accumulated compound interest at the end of the term Correct answer.
  2. The single deposit today that would grow to the same total
  3. The present worth of the payments discounted to today
  4. The total interest earned without any principal

Explanation

The future value of an annuity accumulates every payment with compound interest to the final date. It equals the total of the payments plus all interest earned on them.

Question 41Simple interest, compound interest, annuities

A savings plan pays 5% simple interest. How long will it take $4,000 to earn $600 of interest?

  1. 3 years Correct answer.
  2. 2 years
  3. 5 years
  4. 4 years

Explanation

Rearrange I = P × r × t to t = I ÷ (P × r). Here t = 600 ÷ (4,000 × 0.05) = 600 ÷ 200 = 3 years.

Question 42Simple interest, compound interest, annuities

Which formula gives the present value of a single sum to be received in n periods at periodic compound rate i?

  1. FV × (1 + i × n)
  2. FV ÷ (1 + i)^n Correct answer.
  3. FV × (1 + i)^n
  4. FV ÷ (1 + i × n)

Explanation

Discounting reverses compounding, so present value equals future value divided by (1 + i)^n. Multiplying by (1 + i)^n would compound forward instead.

Question 43Simple interest, compound interest, annuities

A company invests $10,000 at 6% compounded annually for 3 years. What is the balance at the end of year 3?

  1. $11,940.00
  2. $11,800.00
  3. $12,000.00
  4. $11,910.16 Correct answer.

Explanation

Compound balance equals P × (1 + i)^n = 10,000 × 1.06^3. Since 1.06^3 ≈ 1.191016, the balance is about $11,910.16.

Question 44Simple interest, compound interest, annuities

A bank quotes 12% nominal annual interest compounded monthly. What is the effective annual rate?

  1. 12.00%
  2. 12.68% Correct answer.
  3. 12.75%
  4. 12.36%

Explanation

The effective rate is (1 + 0.12/12)^12 − 1 = 1.01^12 − 1 ≈ 0.1268, or 12.68%. Monthly compounding raises the effective rate above the nominal rate.

Question 45Simple interest, compound interest, annuities

An ordinary annuity pays $1,000 at the end of each year for 4 years at 5% annual interest. What is its future value?

  1. $4,310.13 Correct answer.
  2. $4,525.63
  3. $4,000.00
  4. $4,725.50

Explanation

The future value factor for an ordinary annuity is [(1 + i)^n − 1] ÷ i. Here [(1.05)^4 − 1] ÷ 0.05 ≈ 4.3101, so the future value is about $4,310.13.

Question 46Simple interest, compound interest, annuities

What is the present value of $5,000 to be received in 3 years if the discount rate is 8% compounded annually?

  1. $4,198.00
  2. $4,629.63
  3. $4,940.00
  4. $3,969.16 Correct answer.

Explanation

Present value is FV ÷ (1 + i)^n = 5,000 ÷ 1.08^3. Since 1.08^3 ≈ 1.259712, the present value is about $3,969.16.

Question 47Simple interest, compound interest, annuities

A loan of $20,000 carries 9% simple interest. The borrower repays the principal and interest after 8 months. What amount is due?

  1. $21,200 Correct answer.
  2. $22,400
  3. $20,600
  4. $21,800

Explanation

Interest is 20,000 × 0.09 × (8/12) = $1,200. Adding principal gives a payoff of $21,200.

Question 48Simple interest, compound interest, annuities

A company sets up a sinking fund with equal deposits at the end of each quarter earning 2% per quarter. Which factor computes the fund balance after 10 quarterly deposits?

  1. 10 × 0.02
  2. (1.02)^10
  3. [1 − (1.02)^−10] ÷ 0.02
  4. [(1.02)^10 − 1] ÷ 0.02 Correct answer.

Explanation

The future value of an ordinary annuity uses the accumulation factor [(1 + i)^n − 1] ÷ i. With i = 0.02 and n = 10, the factor is [(1.02)^10 − 1] ÷ 0.02.

Question 49Simple interest, compound interest, annuities

An investor wants $10,000 in 5 years. The account pays 6% compounded annually. What single amount must be deposited today?

  1. $7,472.58 Correct answer.
  2. $7,935.44
  3. $7,581.26
  4. $7,000.00

Explanation

The required deposit is the present value 10,000 ÷ 1.06^5. Because 1.06^5 ≈ 1.338226, the deposit is about $7,472.58.

Question 50Simple interest, compound interest, annuities

Two banks offer the same 10% nominal annual rate, one compounding semiannually and one compounding quarterly. How do their effective annual rates compare?

  1. The quarterly-compounded account has the higher effective rate Correct answer.
  2. The comparison cannot be made without the principal
  3. They are equal because the nominal rate is the same
  4. The semiannual-compounded account has the higher effective rate

Explanation

More frequent compounding raises the effective annual rate for a fixed nominal rate. Quarterly compounding gives about 10.38% versus about 10.25% for semiannual compounding.