Maths: Insurance and Straight Line Method
FINAL EXAMINATION
MATHS FOR BUSINESS AND FINANCE
5
Q=Sullivan handbags marks up their bags at 45% of the selling price. Pat Sullivan saw a bag at a trade show that she would sell to her customers for $85. What is the most she could pay for the bag and still retain the 45% markup of the selling price?
P=selling price
C=cost of product
R=percentage markup
P=C(1+r)
85=C(1+45%/100=1.45)
C=85/1.45=58.62
Check back
58.62*45%=26.379=26.38
58.62+26.38=85
Answer: Most she could pay for the bag and still retain markup of 45% is: $58.62
6.
Q=Jeff Jones earns $1,200 per week. He is married and claims four (4) withholding allowances. The FICA rate is as follows: Social Security rate is 6.2% on $97,500; Medicare rate is 1.45%. To date his cumulative wages are $6,000. Each pay check, his employer also deducts $42.50 for the health Insurance. What is his net pay? (Calculate FIT by percentage method)
Gross earnings $1,200 weekly
Total deductions = $42.50 Health insurance
+1.45% of weekly salary=1.45%=0.0145*1,200=17.40 +6.2%=0.062X1200=74.40 Social Security
=42.50+17.40+74.40=$134.30
FIT = $17.40+74.40*2=$183.60
Answer: Net pay = $1,200-$134.30=$1,065.70
8.
Q=On May 12, Bob Campbell accepted a $5,000 note in granting a time extension of a bill of goods bought by Rick Ween. Terms of the note were 8% for 120 days. On July 8, Bob needed a raise in cash and discounted the note at Rick’s bank at a discount rate of 9%. Calculate Bob’s proceeds.
Using exact date table;
May 12 to July 8 =57 days
Note amount = $5,000
Period =120 days
Rate = 9% =0.09
5000*57*0.09
360 = $71.2500
Total proceeds = Investment + total interest
=$ 5000+$71.25=$5,071.25
Answer: Bob’s proceeds=$5,071.25
10.
Q= Roger Fox made deposits of $900 semiannually to Reel bank, which pays 6% interest compounded semiannually. After seven years, Roger made no more deposits. What would be the balance in the account
MATHS FOR BUSINESS AND FINANCE
5
Q=Sullivan handbags marks up their bags at 45% of the selling price. Pat Sullivan saw a bag at a trade show that she would sell to her customers for $85. What is the most she could pay for the bag and still retain the 45% markup of the selling price?
P=selling price
C=cost of product
R=percentage markup
P=C(1+r)
85=C(1+45%/100=1.45)
C=85/1.45=58.62
Check back
58.62*45%=26.379=26.38
58.62+26.38=85
Answer: Most she could pay for the bag and still retain markup of 45% is: $58.62
6.
Q=Jeff Jones earns $1,200 per week. He is married and claims four (4) withholding allowances. The FICA rate is as follows: Social Security rate is 6.2% on $97,500; Medicare rate is 1.45%. To date his cumulative wages are $6,000. Each pay check, his employer also deducts $42.50 for the health Insurance. What is his net pay? (Calculate FIT by percentage method)
Gross earnings $1,200 weekly
Total deductions = $42.50 Health insurance
+1.45% of weekly salary=1.45%=0.0145*1,200=17.40 +6.2%=0.062X1200=74.40 Social Security
=42.50+17.40+74.40=$134.30
FIT = $17.40+74.40*2=$183.60
Answer: Net pay = $1,200-$134.30=$1,065.70
8.
Q=On May 12, Bob Campbell accepted a $5,000 note in granting a time extension of a bill of goods bought by Rick Ween. Terms of the note were 8% for 120 days. On July 8, Bob needed a raise in cash and discounted the note at Rick’s bank at a discount rate of 9%. Calculate Bob’s proceeds.
Using exact date table;
May 12 to July 8 =57 days
Note amount = $5,000
Period =120 days
Rate = 9% =0.09
5000*57*0.09
360 = $71.2500
Total proceeds = Investment + total interest
=$ 5000+$71.25=$5,071.25
Answer: Bob’s proceeds=$5,071.25
10.
Q= Roger Fox made deposits of $900 semiannually to Reel bank, which pays 6% interest compounded semiannually. After seven years, Roger made no more deposits. What would be the balance in the account