Rachael has a job assembling a certain car accessory.

Full Answer Section

Where:

• PV is the present value
• FV is the future value
• r is the interest rate
• n is the number of compounding periods per year
• t is the number of years

PV = $14,750 / (1 + 0.04/4)^(4*5)

PV = $12,088.28

3. The amount of the sales tax is $117.92.

Sales tax = purchase price * sales tax rate

Sales tax = $2,050.75 * 0.0575

Sales tax = $117.92

4. You should invest $6,702.12 now at 6% interest, compounded semiannually in order to reach your goal of $11,000 in 13 years.

PV = FV / (1 + r/n)^(n*t)

Where:

• PV is the present value
• FV is the future value
• r is the interest rate
• n is the number of compounding periods per year
• t is the number of years

PV = $11,000 / (1 + 0.06/2)^(2*13)

PV = $6,702.12

5. Ross's tax liability is $12,625.50.

Taxable income = adjusted gross income - standard deduction

Taxable income = $69,100 - $12,950

Taxable income = $56,150

Tax table for single filers with taxable income between $55,951 and $59,750:

Tax calculation:

Income tax = ($55,950 * 0.12) + ($56,150 - $55,950) * 0.22

Income tax = $6,714 + $411.50

Income tax = $12,625.50

6.

Loan 1:

• Interest = $185,000 * 0.14 * (5/12) = $1,875.00
• Maturity value = $185,000 + $1,875.00 = $186,875.00

Loan 2:

• Interest = $185,000 * 0.14 * (7/12) = $2,625.00
• Maturity value = $185,000 + $2,625.00 = $187,625.00

7. The amount of sales tax is $63.39.

Sales tax = purchase price * sales tax rate

Sales tax = $1,584.97 * 0.04

Sales tax = $63.39

8. The amount of simple interest is $1,445.00.

Simple interest = principal * interest rate * time

Simple interest = $8,500 * 0.085 * (31/12)

Simple interest = $1,445

Sample Solution

1. Rachael's gross pay is $4,643.68.

Pay Level Items produced Rate per Item Total
1 1–160 $9.58 $1,532.80
2 Over 160 $11.41 $3,110.88
Total: $4,643.68

2. Inez should invest $12,088.28 now at 4% interest, compounded quarterly in order to reach her goal of $14,750 in 5 years.

PV = FV / (1 + r/n)^(n*t)