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ASSEB HS Financial Literacy study materials
ASSEB HS Financial Literacy study resources

ASSEB HS Financial Literacy practice questions

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Question 1Money Management and Budgeting

A student receives a monthly allowance of 1,200 and wants to set aside money for savings before spending on entertainment. In a zero-based budget, what should happen to the savings amount?

  1. It is assigned as a planned category so that income minus all assignments equals zero Correct answer.
  2. It is left unassigned until the end of the month as a buffer
  3. It is excluded from the budget because savings is not spending
  4. It is recorded only after entertainment spending is complete

Explanation

A zero-based budget assigns every unit of income to a named purpose, including savings, until income minus all assignments equals zero. Savings is treated as a planned category rather than a leftover. This makes saving intentional instead of dependent on what remains after discretionary spending.

Question 2Money Management and Budgeting

Which document typically records every planned income and expense category for a single month before the month begins?

  1. A credit report
  2. A balance sheet
  3. A monthly budget Correct answer.
  4. A bank reconciliation statement

Explanation

A monthly budget is a forward-looking plan that lists expected income and assigns amounts to expense and savings categories for that period. It is prepared before or at the start of the month to guide spending decisions. The other documents record past transactions, credit history, or a snapshot of assets and liabilities.

Question 3Money Management and Budgeting

A learner earns 800 per month and lists fixed costs of rent 300, transport 80, and phone 40, plus variable costs of food and entertainment. Which amount represents fixed expenses in the budget?

  1. 80
  2. 300
  3. 420 Correct answer.
  4. 800

Explanation

Fixed expenses are costs that stay the same from month to month regardless of usage, so rent 300, transport 80, and phone 40 total 420. Food and entertainment vary with choices and are classified as variable. Total income of 800 is not an expense figure.

Question 4Money Management and Budgeting

Which expense is best classified as a variable cost in a personal budget?

  1. A fixed-rate rent payment due on the first day
  2. An annual insurance premium paid in equal installments
  3. A utility bill that rises with heavier air-conditioning use Correct answer.
  4. A monthly streaming subscription charged at the same rate

Explanation

A variable cost changes with usage or behavior, so a utility bill that rises with heavier air-conditioning use qualifies. The amount is not fixed in advance and can be influenced by consumption choices. The other options are recurring amounts that stay constant each period.

Question 5Money Management and Budgeting

A student wants to build an emergency fund while carrying a high-interest credit card balance. Which approach best reflects sound money management?

  1. Borrow additional funds to build a larger emergency fund quickly
  2. Stop all saving until the card balance is fully repaid
  3. Keep a small starter emergency buffer while directing most surplus to the high-interest debt Correct answer.
  4. Invest all surplus in long-term assets and pay only the card minimum

Explanation

High-interest debt grows faster than most savings can earn, so prioritizing repayment usually saves more money overall. A small starter buffer still protects against new borrowing when an unexpected cost appears. Combining a modest fund with aggressive repayment balances risk and cost.

Question 6Money Management and Budgeting

Which item belongs on the income side of a personal monthly budget?

  1. A part-time wage deposited to the account Correct answer.
  2. A monthly bus pass renewal
  3. A grocery purchase paid by debit card
  4. A gift card spent on clothing

Explanation

Income is money flowing in, such as wages deposited from part-time work. Groceries, transport passes, and clothing purchases are outflows that belong on the expense side. Correctly separating inflows from outflows keeps the budget total accurate.

Question 7Money Management and Budgeting

A learner's budget shows income of 1,500 and planned expenses of 1,620. What does this budget indicate?

  1. A balanced budget with no adjustment needed
  2. An error, because expenses cannot exceed income
  3. A deficit requiring spending cuts or added income Correct answer.
  4. A surplus that can be moved to savings

Explanation

When planned expenses exceed income, the budget is in deficit and must be corrected by reducing spending or increasing income. Expenses can legally exceed income, but the shortfall must be funded by borrowing or savings. A surplus occurs only when income is greater than expenses.

Question 8Money Management and Budgeting

Which practice best describes the envelope method of budgeting?

  1. Allocating cash into labeled categories and spending only from each category Correct answer.
  2. Investing a fixed share of income each payday
  3. Paying all bills at the start of the year
  4. Tracking spending automatically through a banking app

Explanation

The envelope method divides available cash into labeled categories, and spending is limited to what each envelope holds. It enforces category limits physically and makes overspending visible immediately. The other options describe tracking tools, investing, or bill timing rather than category-based cash limits.

Question 9Money Management and Budgeting

A learner wants a budget rule that allocates 50 percent of income to needs, 30 percent to wants, and 20 percent to savings and debt repayment. Which framework is this?

  1. The pay-yourself-first rule
  2. The zero-based rule
  3. The 50/30/20 rule Correct answer.
  4. The 70/20/10 rule

Explanation

The 50/30/20 framework splits after-tax income into needs, wants, and savings or debt repayment in those proportions. It offers a simple starting structure for people new to budgeting. The other named approaches use different priorities or percentages.

Question 10Money Management and Budgeting

A student's net monthly income is 1,000. Using the 50/30/20 rule, how much is directed to savings and debt repayment?

  1. 500
  2. 150
  3. 200 Correct answer.
  4. 300

Explanation

Under the 50/30/20 rule, 20 percent of net income goes to savings and debt repayment. Twenty percent of 1,000 is 200. The remaining 500 and 300 are allocated to needs and wants respectively.

Question 11Money Management and Budgeting

Which action best demonstrates tracking actual spending against a planned budget?

  1. Estimating expenses from memory at year end
  2. Filing receipts without reviewing the totals
  3. Setting next year's savings goal once
  4. Comparing recorded category totals with the planned amounts each week Correct answer.

Explanation

Budget tracking compares what was actually spent in each category with the planned amount, ideally at regular intervals. Frequent comparison allows timely adjustments before overspending grows. Filing without review, one-time goal setting, and year-end estimates do not provide that ongoing control.

Question 12Money Management and Budgeting

A learner keeps a spending log for one month and finds 180 spent on takeaway meals, which was not in the original plan. What is the most useful next step in the budgeting cycle?

  1. Delete the category to simplify the budget
  2. Ignore the figure because the month is over
  3. Adjust future category limits or income allocations to reflect this actual pattern Correct answer.
  4. Double all other categories to compensate

Explanation

Actual spending data should feed back into the plan so that future budgets reflect real behavior. Revising category limits or reallocating income makes the budget realistic and sustainable. Ignoring the data, deleting categories, or arbitrary increases undermine the purpose of tracking.

Question 13Money Management and Budgeting

Which of these is a need rather than a want in a typical student budget?

  1. A concert ticket for a weekend event
  2. A newer model smartphone
  3. Basic groceries for the week Correct answer.
  4. A subscription to a gaming service

Explanation

Needs are essential for health, safety, or functioning, and basic groceries fall clearly in that group. Concert tickets, upgraded phones, and gaming subscriptions are discretionary wants that can be reduced when money is tight. Distinguishing needs from wants is central to prioritizing a budget.

Question 14Money Management and Budgeting

A learner has 250 left after essential expenses and must choose between paying a 200 utility arrears bill now or buying a discounted 180 course. Which choice best reflects priority-based money management?

  1. Pay the arrears bill to avoid penalties and service disconnection Correct answer.
  2. Delay both decisions until next month
  3. Buy the course because it is discounted
  4. Split the money evenly between both

Explanation

Priority-based budgeting ranks obligations by consequence, and unpaid essential bills can trigger penalties, interest, or service loss. Clearing the arrears protects essential services and avoids added cost. A discount does not outweigh a riskier obligation, and delaying both simply postpones the problem.

Question 15Money Management and Budgeting

What is the main purpose of a sinking fund in a personal budget?

  1. To provide emergency cash for unexpected job loss
  2. To cover a large known future expense by setting aside money regularly Correct answer.
  3. To pay off a credit card in a single lump sum
  4. To reduce taxes on investment income

Explanation

A sinking fund sets aside regular amounts so a known future cost, such as a laptop or annual insurance, can be paid without borrowing. It differs from an emergency fund, which targets unpredictable events. Spreading the cost over time reduces the strain on any single month.

Question 16Money Management and Budgeting

A student expects a 480 annual insurance premium in ten months and wants to save an equal amount each month. How much should be set aside monthly?

  1. 48 Correct answer.
  2. 96
  3. 40
  4. 60

Explanation

Dividing the 480 premium by the ten months available gives 48 per month. Saving that amount regularly means the full premium is available when due without borrowing. The other figures do not match the total and time frame.

Question 17Money Management and Budgeting

Which statement correctly describes the relationship between a budget and cash flow?

  1. A budget replaces the need to monitor actual cash flow
  2. A budget and cash flow are identical records kept by banks
  3. Cash flow is only relevant to businesses, not individuals
  4. A budget plans inflows and outflows, while cash flow records when money actually moves Correct answer.

Explanation

A budget is a plan for expected inflows and outflows, while cash flow tracks the actual timing of money received and paid. Timing matters because a bill may fall due before income arrives even when the monthly plan balances. Comparing the two reveals shortfalls that a plan alone can hide.

Question 18Money Management and Budgeting

A learner is paid 900 on the 1st, but rent of 500 and a loan payment of 300 are both due on the 28th, while a 400 course fee is due on the 5th. What does this timing pattern create?

  1. A balanced budget with no timing issue
  2. A deficit that cannot be resolved
  3. A cash-flow gap before the 28th payments are due Correct answer.
  4. A surplus on the 1st that removes all later risk

Explanation

Paying the 400 course fee on the 5th leaves only 500 of the 900, while 800 is due on the 28th, creating a timing shortfall. The monthly totals may balance, but the dates of inflows and outflows do not align. Cash-flow planning addresses exactly this kind of gap.

Question 19Money Management and Budgeting

Which budgeting tool is most useful for a learner who wants categories to update automatically as transactions are recorded?

  1. A single receipt folder
  2. A paper ledger kept in a notebook
  3. A handwritten list of goals
  4. A spreadsheet with linked totals and category formulas Correct answer.

Explanation

A spreadsheet can link category cells to totals through formulas, so totals update automatically when a transaction is entered. This reduces arithmetic errors and speeds up review. Paper records, receipt folders, and goal lists require manual recalculation or do not track spending at all.

Question 20Money Management and Budgeting

A student uses a debit card for daily purchases and wants to avoid overdraft fees. Which practice best supports that goal?

  1. Relying on the card's overdraft protection as a routine buffer
  2. Making all purchases at the start of the month
  3. Ignoring small purchases because they are insignificant
  4. Checking the available balance before making a purchase Correct answer.

Explanation

Overdrafts occur when a payment exceeds the available balance, so checking the balance before spending prevents them. Treating overdraft protection as routine normalizes fees and interest. Small purchases still reduce the balance, and front-loading spending raises the risk of a shortfall.

Question 21Money Management and Budgeting

Which of the following best describes discretionary spending in a personal budget?

  1. Payments required by contract, such as rent
  2. Interest charged on a loan
  3. Taxes withheld from wages
  4. Spending on non-essential items that can be adjusted or removed Correct answer.

Explanation

Discretionary spending covers non-essential purchases that a person can reduce or eliminate when money is tight. It contrasts with committed costs such as rent, taxes, and loan interest, which are obligatory. Recognizing discretionary items gives flexibility during a shortfall.

Question 22Money Management and Budgeting

A learner's budget shows a monthly surplus of 120. Which use of the surplus best strengthens long-term financial resilience?

  1. Leaving it in a current account indefinitely with no purpose
  2. Using it to increase a recurring subscription
  3. Spending it immediately on entertainment
  4. Directing it to an emergency fund until a target is reached Correct answer.

Explanation

A surplus directed to an emergency fund builds a buffer against unexpected costs and reduces reliance on borrowing. Once a target is reached, the surplus can be redirected to other goals. Spending it, upgrading subscriptions, or leaving it idle weakens resilience.

Question 23Money Management and Budgeting

Which pair correctly matches a budgeting term with its meaning?

  1. Deficit - expenses exceed income Correct answer.
  2. Balanced budget - income greatly exceeds expenses
  3. Deficit - income exceeds expenses
  4. Surplus - expenses exceed income

Explanation

A deficit occurs when expenses exceed income, meaning the shortfall must be funded from savings or borrowing. A surplus is the opposite, where income exceeds expenses. A balanced budget has income equal to expenses, not a large excess.

Question 24Money Management and Budgeting

A learner earning 1,400 per month has fixed costs of 700, variable essentials of 300, and discretionary spending of 250. After also saving 100, what is the remaining unallocated amount?

  1. 100
  2. 150
  3. 250
  4. 50 Correct answer.

Explanation

Adding the allocations gives 700 plus 300 plus 250 plus 100, which totals 1,350. Subtracting that from income of 1,400 leaves 50 unallocated. Identifying the remainder allows it to be assigned purposefully in a zero-based plan.

Question 25Money Management and Budgeting

Why is reviewing a budget at the end of each month considered good practice?

  1. It removes the need to track spending during the month
  2. It guarantees that income will rise next month
  3. It permanently fixes category amounts for the year
  4. It reveals variances between plan and actual spending so adjustments can be made Correct answer.

Explanation

A month-end review compares planned amounts with actual spending and highlights variances that signal unrealistic categories or changing habits. Those findings guide adjustments for the next period. A review does not raise income, replace in-month tracking, or freeze amounts permanently.

Question 26Money Management and Budgeting

In a personal budget, which pair of terms is used to classify spending that stays the same each month versus spending that changes with usage or choice?

  1. Fixed costs and variable costs Correct answer.
  2. Gross income and net income
  3. Surplus and deficit
  4. Assets and liabilities

Explanation

Fixed costs are outgoings that stay roughly constant from month to month, such as rent or a subscription. Variable costs change with usage or decisions, such as electricity or groceries, so the pair describes spending behaviour rather than income or balance outcomes.

Question 27Money Management and Budgeting

A learner records every purchase in a notebook and labels each one with a budget category. Which budgeting activity is being carried out?

  1. Setting a savings target for retirement
  2. Categorising transactions to compare with the plan Correct answer.
  3. Forecasting next year's income
  4. Negotiating a lower interest rate

Explanation

Assigning each transaction to a budget category is the core of tracking, because it lets the learner total actual spending per category and compare it with the planned amounts. Forecasting, negotiating rates, and long-term goal setting are separate activities that do not depend on labelling individual purchases.

Question 28Money Management and Budgeting

Which statement best explains why a budget is described as a plan rather than a record?

  1. It replaces the need to keep receipts or statements.
  2. It lists only expenses that have already been paid.
  3. It is prepared only once and then stays unchanged.
  4. It sets intended income and spending before the period begins. Correct answer.

Explanation

A budget is forward-looking: it states the income expected and the spending intended for an upcoming period. A record, by contrast, captures what actually happened, so the two are compared rather than treated as the same document.

Question 29Money Management and Budgeting

A learner's monthly budget shows planned income of 1,200 and planned expenses of 1,200. Which term describes this position?

  1. A balanced budget Correct answer.
  2. An overdraft
  3. A surplus
  4. A deficit

Explanation

When planned income equals planned expenses, the budget balances and there is neither surplus nor shortfall. A surplus arises when income exceeds expenses, a deficit when expenses exceed income, and an overdraft is a banking facility rather than a budget position.

Question 30Money Management and Budgeting

A learner wants a simple system that automatically totals spending by category each time a transaction is recorded. Which budgeting approach fits that requirement best?

  1. A list of goals written on paper
  2. A bank statement kept unopened
  3. A single envelope holding all cash
  4. A spreadsheet with category formulas Correct answer.

Explanation

A spreadsheet can hold category formulas that recalculate totals whenever a new transaction is entered, which is exactly the automatic updating the learner wants. The other options either give no categories or provide no mechanism for recalculating totals.

Question 31Money Management and Budgeting

A learner's essential expenses total 800 and income is 1,000 each month. Which amount represents the maximum that could be directed to discretionary spending while keeping essentials fully covered?

  1. 0
  2. 800
  3. 200 Correct answer.
  4. 1,000

Explanation

Subtracting essential expenses of 800 from income of 1,000 leaves 200 available for non-essential spending. Spending more than that remainder would mean essentials could not be fully covered from income.

Question 32Money Management and Budgeting

A learner receives a 600 bonus and has no emergency savings. Which use of the bonus best supports financial resilience?

  1. Depositing it into an emergency fund Correct answer.
  2. Lending it without any repayment agreement
  3. Using it to increase a monthly subscription plan
  4. Spending it on a holiday booked immediately

Explanation

An emergency fund absorbs unexpected costs without forcing borrowing, which is the central element of resilience. The other choices convert the windfall into consumption or an unrecoverable outflow, leaving the learner exposed to the next surprise expense.

Question 33Money Management and Budgeting

A learner's income arrives on the 1st, but rent and a loan repayment fall due on the 28th. Which budgeting practice addresses this timing mismatch most directly?

  1. Increasing the credit limit on a card
  2. Setting aside the rent and loan amounts when income arrives Correct answer.
  3. Ignoring due dates until a reminder appears
  4. Moving all spending to the end of the month

Explanation

Reserving the committed amounts at the point income arrives ensures the funds are still present when the later due dates occur. Relying on credit or on late reminders shifts the problem rather than solving the timing gap.

Question 34Money Management and Budgeting

A learner sets aside 60 each month so that a 720 annual car insurance premium can be paid in full. Which budgeting technique is being used?

  1. A sinking fund Correct answer.
  2. A balance transfer
  3. Payday lending
  4. An impulse purchase plan

Explanation

A sinking fund accumulates a known future expense in regular instalments so the full amount is ready when due. Dividing 720 by 12 gives the 60 monthly amount, which matches the technique rather than any form of borrowing.

Question 35Money Management and Budgeting

A learner's budget shows a monthly surplus of 150. Which action best uses that surplus to reduce future financial risk?

  1. Adding it to regular discretionary spending
  2. Leaving it unrecorded in a current account
  3. Directing it to clear a high-interest debt Correct answer.
  4. Using it to raise a recurring subscription tier

Explanation

Applying a surplus to high-interest debt reduces the interest cost that compounds over time, lowering future obligations. Spending the surplus or leaving it untracked preserves the underlying risk instead of reducing it.

Question 36Money Management and Budgeting

A learner has 300 left after essentials and must choose between repaying a 300 loan with a 20 percent annual interest rate or buying a 300 item on a 12-month interest-free plan. Which choice reduces total cost?

  1. Repaying the loan, because interest stops accruing Correct answer.
  2. Buying the item, because the plan is interest-free
  3. Doing neither and holding the cash idle
  4. Splitting the 300 equally between both

Explanation

Clearing the loan eliminates interest at 20 percent a year, which is a certain saving. The interest-free plan avoids interest only if every instalment is paid on time, so it does not produce a saving comparable to removing a charged balance.

Question 37Money Management and Budgeting

A learner's monthly take-home pay is 1,800. Fixed costs are 750, variable essentials are 450, and discretionary spending is 300. Which figure is the monthly surplus or shortfall?

  1. A balanced budget
  2. A shortfall of 300
  3. A surplus of 300 Correct answer.
  4. A surplus of 600

Explanation

Total outgoings are 750 plus 450 plus 300, which equals 1,500. Subtracting 1,500 from take-home pay of 1,800 leaves a surplus of 300.

Question 38Money Management and Budgeting

A learner's spending log shows 90 spent on streaming services, while the budget allowed 30. Which adjustment to the next month's plan follows most directly from this variance?

  1. Removing the streaming category from the budget entirely
  2. Recording the 90 as an essential fixed cost
  3. Reducing the streaming allowance to 30 and cancelling unused subscriptions Correct answer.
  4. Increasing income by 60 without any other change

Explanation

A variance of 60 over plan signals that the category allowance and actual behaviour are misaligned. Bringing the allowance back to 30 and cutting unused subscriptions closes the gap at its source rather than disguising it.

Question 39Money Management and Budgeting

Which statement correctly distinguishes gross income from net income in a personal budget?

  1. Net income is the total earned before any deductions.
  2. Gross income is what remains after tax and deductions are removed.
  3. Gross income is earnings before deductions, while net income is what is actually received. Correct answer.
  4. Gross and net income are identical for anyone paid monthly.

Explanation

Gross income is the amount earned before tax and other deductions, whereas net income is the amount that actually reaches the learner and can be budgeted. Budgeting on net income avoids planning to spend money that has already been deducted.

Question 40Money Management and Budgeting

A learner wants to compare planned and actual spending for a category at the end of the month. Which comparison correctly describes a favourable variance?

  1. Planned spending was never recorded.
  2. Actual spending exceeded the planned amount.
  3. The category was omitted from the budget.
  4. Actual spending was below the planned amount. Correct answer.

Explanation

A favourable variance for an expense category means actual spending came in below plan, leaving more of the budget intact. Spending above plan is an unfavourable variance, and missing records or omitted categories make any comparison impossible.

Question 41Income, Taxes, and Employment

A student works part-time and receives a payslip showing gross pay of 2,000, income tax withheld of 180, and social insurance contributions of 140. What is the net pay on this payslip?

  1. 1,860
  2. 1,820
  3. 2,320
  4. 1,680 Correct answer.

Explanation

Net pay equals gross pay minus all deductions: 2,000 − 180 − 140 = 1,680. Withholding tax and social insurance are both taken out before the employee receives the money.

Question 42Income, Taxes, and Employment

Which term describes the total amount an employee earns before any tax or other deductions are taken out?

  1. Net pay
  2. Disposable income
  3. Gross pay Correct answer.
  4. Take-home pay

Explanation

Gross pay is the full amount earned from wages or salary before deductions. Net pay, take-home pay, and disposable income all describe money after tax and other deductions.

Question 43Income, Taxes, and Employment

Under a progressive income tax system, which statement best describes how the tax rate applies to a taxpayer's income?

  1. Every taxpayer pays the same percentage regardless of income level.
  2. The rate rises as income rises, applied in bands to portions of income. Correct answer.
  3. Higher-income earners pay a lower marginal rate than lower-income earners.
  4. Only income above the average wage is taxed at all.

Explanation

Progressive taxation divides income into bands, and each band is taxed at a higher marginal rate than the one below it. This makes the average tax rate rise with income without taxing the whole income at the top rate.

Question 44Income, Taxes, and Employment

A worker earns 3,000 in a month. The first 1,000 is tax-free, and the remaining amount is taxed at 10%. How much income tax is due?

  1. 200 Correct answer.
  2. 300
  3. 100
  4. 30

Explanation

Subtract the tax-free allowance first: 3,000 − 1,000 = 2,000 of taxable income. Applying the 10% rate to 2,000 gives 200 in tax.

Question 45Income, Taxes, and Employment

Which of the following is normally a mandatory payroll deduction for an employee?

  1. A charitable donation arranged through payroll
  2. A voluntary pension top-up chosen by the employee
  3. A subscription to a workplace social club
  4. Social insurance contributions required by law Correct answer.

Explanation

Mandatory deductions are those required by law, such as social insurance and income tax withholding, and they are taken regardless of employee preference. Voluntary items like donations, top-ups, and club fees are optional.

Question 46Income, Taxes, and Employment

An employee's contract states an annual salary of 24,000 paid in twelve equal monthly instalments. What is the gross monthly pay before deductions?

  1. 1,200
  2. 2,000 Correct answer.
  3. 2,400
  4. 24,000

Explanation

Dividing the annual salary by twelve months gives 24,000 ÷ 12 = 2,000 per month. This figure is gross pay because no deductions have yet been applied.

Question 47Income, Taxes, and Employment

Why do many tax systems provide a tax-free personal allowance before applying income tax rates?

  1. To make the tax rate identical for all income levels
  2. To ensure everyone pays at least some income tax
  3. To protect a basic level of income from taxation Correct answer.
  4. To replace the need for social insurance contributions

Explanation

A personal allowance exempts a basic amount of income, so tax is levied only on income above that threshold. This supports progressivity and shields low earners from income tax.

Question 48Income, Taxes, and Employment

Which document is issued by an employer to summarise an employee's total earnings and tax withheld over a tax year?

  1. A bank statement
  2. A job reference letter
  3. A purchase receipt
  4. An annual earnings and tax summary Correct answer.

Explanation

Employers provide an annual statement of total pay and tax withheld so the employee can complete a tax return or claim a refund. Bank statements, references, and receipts do not record payroll tax data.

Question 49Income, Taxes, and Employment

A self-employed designer must handle their own tax affairs. Which obligation most typically falls on a self-employed person rather than a salaried employee?

  1. Paying social insurance only through an employer
  2. Receiving a payslip each month from an employer
  3. Reporting income and paying tax through periodic filings Correct answer.
  4. Having income tax withheld automatically by an employer

Explanation

Self-employed workers generally must report their income and settle tax themselves through periodic filings or returns. Salaried employees usually have tax withheld and receive payslips from an employer.

Question 50Income, Taxes, and Employment

An employee's gross pay is 1,500. Income tax is 12% of gross pay, and a fixed social insurance contribution of 90 is also deducted. What is the net pay?

  1. 1,410
  2. 1,230
  3. 1,320 Correct answer.
  4. 1,380

Explanation

Income tax is 12% of 1,500 = 180. Net pay is gross pay minus tax minus the fixed contribution: 1,500 − 180 − 90 = 1,230.