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Chapter 09 Pre-Built Problems 1. Lai Xiaodong, a 22-year-old college-educated man, accepted a job at Foxconn Technology (where the iPad was being produced for Apple) in Chengdu, China, for $26 a day at 12 hours a day, 6 days a week. A company perk included company housing in dorms for the 70,000 employees. It was common for 20 people to be assigned to the same three-bedroom apartment. What were Lai’s hourly, weekly, and annual gross pay? (Round the hourly gross pay to the nearest cent.) Amount Hourly gross pay $ Weekly gross pay $ Annual gross pay $ 2. The Social Security Administration increased the taxable wage base from $107,400 to $110,100. The 6.2% tax rate is unchanged. Joe Burns earned over $120,000 each of the past two years. a. What is the percent increase in the base? Percent increase % b. What is Joe’s increase in Social Security tax for the new year? (Round your answer to the nearest cent.) Increase in social security tax $ 3. Robin Hartman earns $591 per week plus 3% of sales over $6,500. Robin’s sales are $12,200. How much does Robin earn? Amount earned $ 4. Westway Company pays Suzie Chan $3,050 per week. Assume Social Security is 6.2% on $110,100 and 1.45% for Medicare. a. By the end of week 51, how much did Westway deduct for Suzie's Social Security and Medicare for the year? (Round your answers to the nearest cent.) Deductions Social security $ Medicare $ b. What state and federal unemployment taxes does Westway pay on Suzie's yearly salary? The state unemployment rate is 5.1% and the federal unemployment tax is 0.8% on the first $7,000. Payment State unemployment taxes $ Federal unemployment taxes $ 5. Morris Leste, owner of Carlson Company, has three employees who earn $500, $575, and $1,055 per week. What are the total state and federal unemployment taxes that Morris owes for the first 11 weeks of the year and for week 30? Assume a state rate of 5.6% and a federal rate of 0.8%. (Leave no cells blank - be certain to enter "0" wherever required. Round your answers to the nearest cent.) State taxes owed $ Federal taxes owed $ Taxes owed for week 30 $ Chapter 10 Pre-Built Problems 1. Calculate the simple interest and maturity value. (Do not round intermediate calculations. Round your answers to the nearest cent.) Principal $17,400 Interest rate Time 18 mo. Simple interest $ Maturity value $ 2. Complete the following, using ordinary interest. (Use Days in a year table.) (Do not round intermediate calculations. Round the "Interest" and "Maturity value" to the nearest cent.) Principal $2,500 Interest Date rate borrowed 8% Mar. 12 Date repaid Exact time June 08 Interest $ 3. Solve for the missing item in the following. (Do not round intermediate calculations. Round your answer to the nearest cent.) Principal $ 4. Given Interest rate 5.75% Time Simple interest $370 Principal: $17,000, 8%, 240 days Partial On 100th day, $7,400 payments: Maturity value $ On 180th day, $4,200 a. Use the U.S. Rule to solve for total interest cost. (Use 360 days a year. Do not round intermediate calculations. Round your answer to the nearest cent.) Total interest cost $ b. Use the U.S. Rule to solve for balances. (Use 360 days a year. Do not round intermediate calculations. Round your answer to the nearest cent.) On 100th day Balance after the payment $ On 180th day $ c. Use the U.S. Rule to solve for final payment. (Use 360 days a year. Do not round intermediate calculations. Round your answer to the nearest cent.) Final payment $ 5. Diane Van Os decided to buy a new car since her credit union was offering such low interest rates. She borrowed $32,800 at 3.5% on December 21 2012, and paid it off March 25 2014. How much did she pay in interest? (Assume ordinary interest.) (Use Days in a year table.) (Do not round intermediate calculations.Round your answer to the nearest cent.) Interest paid $ 6. Gordon Rosel went to his bank to find out how long it will take for $1,900 to amount to $2,460 at 9% simple interest. Calculate the number of years. (Round time in years to the nearest tenth.) Number of years 7. On April 5, 2014, Janeen Camoct took out an 5% loan for $10,000. The loan is due March 9, 2015. Use ordinary interest to calculate the interest. What total amount will Janeen pay on March 9, 2015? (Use Days in a year table.) (Do not round intermediate calculations. Round your answer to the nearest cent.) Maturity value $ 8. Max Wholesaler borrowed $11,500 on a 7%, 120-day note. After 45 days, Max paid $4,025 on the note. Thirty days later, Max paid an additional $3,450. Use ordinary interest. a. Determine the total interest use the U.S. Rule. (Do not round intermediate calculations. Round your answers to the nearest cent.) Total interest amount $ b. Determine the ending balance due use the U.S. Rule.(Do not round intermediate calculations.Round your answers to the nearest cent.) Ending balance due $ 9. Joanne and Ed Greenwood built a new barn with an attached arena. To finance the loan, they paid $1,335 interest on $45,900 at 4%. What was the time, using exact interest? (Do not round intermediate calculations. Round up your answer to the nearest day.) Time days 10. Andres Michael bought a new boat. He took out a loan for $24,120 at 3.25% interest for 2 years. He made a $4,070 partial payment at 2 months and another partial payment of $2,840 at 7 months. How much is due at maturity? (Do not round intermediate calculations. Round your answers to the nearest cent.) Maturity value $ 11. Shawn Bixby borrowed $27,000 on a 180-day, 11% note. After 80 days, Shawn paid $3,000 on the note. On day 118, Shawn paid an additional $5,000. Use ordinary interest. a. Determine the total interest use the U.S. Rule. (Do not round intermediate calculations. Roundyour answer to the nearest cent.) Total interest $ b. Determine the ending balance due use the U.S. Rule. (Do not round intermediate calculations.Round your answer to the nearest cent.) Ending balance due $ 12. Joy Kirby made a $630 loan to Robinson Landscaping at 5%. Robinson paid back the loan with interest of $9.45. How long in days was the loan outstanding? (Use 360 days a year.) Period Days 13. Molly Ellen, bookkeeper for Keystone Company, forgot to send in the payroll taxes due on April 15. She sent the payment November 8. The IRS sent her a penalty charge of 6.20% simple interest on the unpaid taxes of $1,200. Calculate the penalty. (Remember that the government uses exact interest.) (Use Days in a year table.) (Do not round intermediate calculations. Round your answer to the nearest cent.) Penalty $ Chapter 11 Pre-Built Problems 1. Complete the following table for the simple discount notes. Use the ordinary interest method. Amount due at maturity $40,000 Discount rate Time 170 days Bank discount Proceeds $ $ 2. Calculate the discount period for the bank to wait to receive its money: (Use Days in a year table): Length Date of note of note July 14 50 days Date note discounted August 5 Discount period days 3. Solve for maturity value, discount period, bank discount, and proceeds. Assume a bank discount rate of 9%. Use the ordinary interest method. (Use Days in a year table.) (Do not round intermediate calculations. Round your final answers to the nearest cent.) Length Face value Rate of of (principal) interest note 60 $27,200 9% days Maturity Date of Date note value note discounted August September $ 23 18 Discount period days Bank discount $ 4. Assume the $12,000 Treasury bill, 4% for 13 weeks. Calculate the effective rate of interest. (Use calendar year. Round your answer to the nearest hundredth percent.) Proceeds $ Effective rate of interest % 5. Bill Blank signed an $7,370 note at Citizen’s Bank. Citizen’s charges a discount rate. Assume the loan is for 290 days. a. Find the proceeds. (Use 360 days a year. Do not round intermediate calculations. Round your answer to the nearest cent.) Proceeds $ b. Find the effective rate charged by the bank. (Use 360 days a year. Do not round intermediate calculations. Round your answer to the nearest tenth percent.) Effective rate 11_03_2014_QC_57996 % 6. On Sept. 12, Sheffield Company discounted at Sunshine Bank a $7,520 (maturity value), 142-day note dated June 12. Sunshine’s discount rate was 9%. (Use Days in a year table.) What proceeds did Sheffield Company receive? (Use 360 days a year. Do not round intermediate calculations.) Proceeds received $ 7. The Treasury Department auctioned $31 billion in 3-month bills in denominations of $10,000 at a discount rate of 6.000%. What would be the effective rate of interest? (Use calendar year. Do not round intermediate calculations. Round your answer to the nearest hundredth percent.) Effective rate of interest % 8. On May 12, Scott Rinse accepted an $15,500, 14%, 90-day note for a time extension of a bill for goods bought by Ron Prentice. On June 12, Scott discounted the note at Able Bank at 13%. (Use Days in a year table.) What proceeds does Scott receive? (Use 360 days a year. Do not round intermediate calculations. Round your final answer to the nearest cent.) Proceeds received $ 9. Hafers, an electrical supply company, sold $5,400 of equipment to Jim Coates Wiring, Inc. Coates signed a promissory note May 12 with 5.2% interest. The due date was August 10. Short of funds, Hafers contacted Charter One Bank on July 20; the bank agreed to take over the note at a 6.9% discount. (UseDays in a year table.) What proceeds will Hafers receive? (Use 360 days a year. Do not round intermediate calculations. Round your final answer to the nearest cent.) Proceeds received $ 10. Assume that 3-month Treasury bills totaling $29 billion were sold in $10,000 denominations at a discount rate of 6.100%. In addition, the Treasury Department sold 6month bills totaling $27 billion at a discount rate of 6.045%. a. What is the discount amount for 3-month bills? (Do not round intermediate calculations. Round your final answer to the nearest cent.) Discount amount for 3-month bills $ b. What is the discount amount for 6-month bills? (Do not round intermediate calculations. Round your final answer to the nearest cent.) Discount amount for 6-month bills $ c. What is the effective rate for 3-month bills? (Do not round intermediate calculations. Round your final answer to the nearest hundredth percent.) Effective rate for 3-month bills % d. What is the effective rate for 6-month bills? (Do not round intermediate calculations. Round your final answer to the nearest hundredth percent.) Effective rate for 6-month bills % Chapter 12 Pre-Built Problems 1. Complete the following using compound future value (Please use the following provided Table.) (Round your answers to the nearest cent.) Time 14 years Principal $17,500 Rate 2% Compounded Annually Amount $ Interest 22,400 $ 350 2. Principal: $16,900 Interest rate: 12% Compounded Quarterly Calculate the effective rate (APY) of interest for 1 year. (Please use the following provided Table.) (Do not round intermediate calculations. Round your final answer to the nearest hundredth percent.) Effective rate % 3. Complete the following using present value. (Please use the following provided Table.) (Do not round intermediate calculations. Round the "Rate used" to the nearest tenth percent. Round the "PV factor" to 4 decimal places and final answer to the nearest cent.) Amount desired at end of period $7,400 On PV Table Length of time 6 years Rate Compounded 4% semiannually Period used PV factor used Rate used % PV of amount desired at end of period $ 4. Find the future value. (Use the Table12.1.) (Do not round intermediate calculations. Round the "FV factor" to 4 decimal places and final answer to the nearest cent.) Present Value Length of time On FV Table Rate Compounded Period Rate FV factor used Future value $4,974.45 7 years 20% used 28 Quarterly used 5% 5. Lee Holmes deposited $17,200 in a new savings account at 11% interest compounded semiannually. At the beginning of year 4, Lee deposits an additional $42,200 at 11% interest compounded semiannually. At the end of 6 years, what is the balance in Lee’s account? (Please use the following provided Table.) (Do not round intermediate calculations. Round your answer to the nearest cent.) Balance $ 6. The International Monetary Fund is trying to raise $750 billion in 10 years for new funds to lend to developing countries. At 6% interest compounded quarterly, how much must it invest today to reach $750 billion in 10 years? (Use the following provided Table.) (Do not round intermediate calculations. Enter your answer in billions of dollar rounded to 2 decimal places.) Present Value $ billion 7. Security National Bank is quoting 1-year certificates of deposit with an interest rate of 12% compounded semiannually. Joe Saver purchased a $5,900 CD. What is the CD’s effective rate (APY)? (Please use the following provided Table.) (Do not round intermediate calculations. Round your answer to the nearest hundredth percent.) Effective rate % 8. Lance Jackson deposited $6,200 at Basil Bank at 9% interest compounded daily. What is Lance’s investment at the end of 3 years? (Use Table12.2.) (Do not round intermediate calculations. Round your answer to the nearest cent.) $ Investment $ 9. Paul Havlik promised his grandson Jamie that he would give him $8,500 9 years from today for graduating from high school. Assume money is worth 6% interest compounded semiannually. What is the present value of this $8,500? (Please use the following provided Table.) (Do not round intermediate calculations. Round your answer to the nearest cent.) Present value $ 10. Earl Ezekiel wants to retire in San Diego when he is 65 years old. Earl is now 48. He believes he will need $460,000 to retire comfortably. To date, Earl has set aside no retirement money. Assume Earl gets 3% interest compounded semiannually. How much must Earl invest today to meet his $460,000 goal? (Please use the following provided Table.)(Do not round intermediate calculations. Round your answer to the nearest dollar amount.) Investment $ Chapter 14 Pre-Built Problems 1. Complete the following table: Purchase price of product Chevy Volt $40,000 Down payment Amount financed $11,000 $ Number of Amount of Total of monthly Total finance monthly paymentsmonthly payments payments charge 80 $400 $ $ 2. Calculate (a) the amount financed, (b) the total finance charge, and (c) APR by table lookup. (Use Table14.1and Table14.1(b)) (Do not round intermediate calculations. Round the "Finan nearest cent.) Purchase price Down Number of Amount Total finance of a used car payment monthly payments financed Total of monthly payments charge $5,733 $1,253 48 $ $5,789.76 $ APR (Click to select) 12.50% to 12.75% 13.25% to 13.50% 13.00% to 13.25% 3. Calculate the monthly payment by table lookup and formula. (Answers will not be exact due to rounding of percents in table lookup.). (Use 13% for table lookup.). (Use the loan amortization table) (Round your answers to the nearest cent.) Purchase price Down Number of Amount Total of Total finance APR of a used car payment $5,633 $1,203 monthly payments 48 financed monthly payments $5,689.76 $4,430 charge $1,259.76 Monthly Payment By table $ By formula $ 4. Calculate the average daily balance and finance charge. (Round your answers to the nearest cent.) 9/16 9/19 Billing date Payment Charge: Home 9/30 Depot 10/3 Payment 10/7 Cash advance 30-day billing cycle Previous balance $ 1,400 $ 54 cr. 1,200 54 cr. 64 Finance charge is 1.25% on average daily balance. Average daily balance Finance charge $ $ 5. For the best terms on a loan or credit card, you need a credit score above 700. To achieve this, start establishing credit now. Pay all of your bills on time. In addition, use only onethird of your available credit limit and pay off your revolving balance(s) each month. R.J.Johnson has excellent credit. She wants to purchase a piece of equipment for her business and was offered 5% for 48 months for the $66,000 unit. What is her monthly payment by formula? (Round your answer to the nearest cent.) Monthly payment $ 6. From this partial advertisement: $88.88 per month for 60 months $4,000 used car cash price $50 down payment 13% a. Calculate the amount financed. Amount financed $ b. Calculate the finance charge. (Round your answer to the nearest cent.) Finance change $ c. Calculate the deferred payment price. (Round your answer to the nearest cent.) Deferred payment price $ d. Calculate the APR by (Use Table14.1 and Table14.1(b)). (Round your answers to 2 decimal places.) APR: between % and % e. Check monthly payment (by formula). (Round your answer to the nearest cent.) Monthly payment $ 7. If you are trying to build credit by using a credit card, each time you make a purchase with the credit card, deduct that amount from your checking account. That way, when your credit card bill is due, you will have enough to pay the credit card off in full. Kathy Lehner is going to start doing this. She plans on paying her credit card bill in full this month. How much does she owe with a 6% APR and the following transactions?(Round your answer to the nearest cent.) 10/1 10/3 10/12 10/15 10/25 10/30 31-day billing cycle Previous balance Credit $ 79 cr. Charge: King Soopers 148 Payment 310 cr. Charge: Delta 321 Charge: Holiday Fun 61 Amount owed $ 1,164 $ 8. Peg Gasperoni bought a $50,000 life insurance policy for $170 per year. Ryan Life Insurance Company sent her the following billing instructions along with a premium plan example: "Your insurance premium notice will be mailed to you in a few days. You may pay the entire premium in full without a finance charge or you may pay the premium in installments after a down payment and the balance in monthly installments of $45. The finance charge will be added to the unpaid balance. The finance charge is based on an annual percentage rate of 12%." The total number The monthly The balance of monthly installment The total finance And the total If the total subject to installments before adding charge for all deferred policy And you finance charge ($30 minimum) the finance installments payment price premium is: put down: will be: will be: charge will be: will be: will be: $170 $45.00 $ 125.00 3 $45.00 $ 2.65 $172.65 270 65.00 205.00 5 45.00 5.77 275.77 370 90.00 280.00 7 45.00 10.69 380.69 Peg feels that the finance charge of $2.65 is in error. Check your answer. a. What is the actual finance charge for the first three months? (Round your answer to the nearest cent.) Finance Charge b. Is she correct? $
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