BUSN380 Week 2 TCO 2 Problem Set 2 - Tax Fundamentals Cash Management Distinctions among Financial I

BUSN380 Week 2 TCO 2 Problem Set 2 - Tax Fundamentals Cash Management Distinctions among Financial I

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
TCO 2 - Problem Set 2 - Tax Fundamentals; Cash Management; Distinctions among Financial Institutions 1. Thomas Franklin arrived at the following tax information: Gross salary, $46,660 Interest earnings, $225 Dividend income, $80 One personal exemption, $3,400 Itemized deductions, $7,820 Adjustments to income, $1,150 What amount would Thomas report as taxable income? ANS. Gross salary, $46,660 + Dividend income, $80 + Interest earnings, $225 = $46,765 – Adjustments to income, $1150 – Itemized deductions, $7820 – Personal exemption, $3400 = $34,395 2. What would be the net annual cost of the following checking account? Monthly fee, $3.75; Processing fee, 25 cents per check;
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Checks written, an average of 22 a month. ANS. (22 checks 12 months $0.25) + ($3.75 12 months) = $111 annual cost 3. What would be the average tax rate for a person who paid taxes of $4,864.14 on a taxable income of $39,870? ANS. $4,864.14 / $39,870 x 100 = 12.2% 4. A payday loan company charges 4 percent interest for a two-week period. What would be the annual interest rate from that company? ANS. 52 / 2 = 26 periods X .04 = 1.04 x 100 = 104% 5. What is the annual opportunity cost of a checking account that requires a $350 minimum balance to avoid service charges? Assume an interest rate of 6.5 percent. ANS. $350 x .065 = $22.75...
View Full Document

This note was uploaded on 05/27/2011 for the course BUSN 380 taught by Professor Bloch during the Fall '10 term at DeVry NY.

Page1 / 2

BUSN380 Week 2 TCO 2 Problem Set 2 - Tax Fundamentals Cash Management Distinctions among Financial I

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online