Simple & Compound Interest Questions and Answers

A single person with taxable income of 64895 will have the first 9525 of that income taxed at 10 Determine the taxes owed on just the first 9525 Submit Question

2 Determine what flat tax rate would be necessary to collect The second proposal we ll consider is a modified flat tax pla over 20 000 So everyone in group A will pay no taxes 3 Determine the total taxable income for the whole popula

Health Plan Comparison Plan 1 Plan 2 1000 00 3 000 00 30 00 0 00 Deductible Office Visit cost Monthly Premium Individual 70 00 35 00 Individual Family 1 100 00 1 200 00 A 30 00 B 70 00 C 35 00 D 0 How much money will an individual using Plan 1 spend for insurance with 0 office visits in a month

6 Valley Peat Ltd sells peat moss for 10 per bag Variable costs are 7 50 per bag and annual fixed costs are 100 000 a How many bags of peat must be sold per year to break even b What will be the net income for a year in which 60 000 bags of peat are sold c How many bags must be sold for a net income of 25 000 in a year d What volume of sales would produce a loss of 50 000 in a year

Jacob invests 3 500 in an account that has an annual interest rate of 4 8 compounded monthly Addison invests 4 200 in an account that has an annual interest rate of 3 2 compounded continuously Which of the following statements is true when comparing the amount of money in the two accounts after 10 years After 10 years Addison has about 133 more than Jacob O After 10 years Jacob has about 74 more than Addison O After 10 years Addison and Jacob have the same amount of money in their accounts O After 10 years Addison has about 700 more than Jacob

The SUV sticker showed a base price of 43 252 00 with options totaling 3 850 and a destination charge of 735 00 The dealer s costs are 87 7 of the base price and 90 2 of the options What is the dealer s cost 42 139 70 3 472 70 37 163 75 41 371 45

In its first 10 years a mutual fund produced an average annual return of 19 90 Assume that money invested in this fund continues to eam 1990 compounded annualy How long will it take money investec this lund to double It will take approximately yearts for the money invested in this fund to double

9 A fixed regular payment typically paid weekly basis made by an employer to an employee 10 This type of income is passive not produced by working Investment Value 11 All the property you own of value plus any cash or investments you have Gross pay 12 The income amount a worker earns before deductions or taxes are taken out of the paycheck 13 The cost for the use of borrowed money Paid to the lender by the borrower of the money 14 The amount remaining of a paycheck after all of the payroll deductions and income tax are taken out 15 The charge for the use of borrowed money expressed as a percentage of the amount borrowed 16 A certain amount of money saved today is worth more than the same amount saved in the future The reason is that money saved now has time to grow with interest I 17 Any debts you have outstanding such as a credit card balance student loans or the money mom and dad lent you that they expect to get back 18 A period of economic decline producers are making products that people are not buying supply outpaces demand Trade Off 19 That which must be given up in order to get something else a trade off compound interest 20 Interest that is not compounded but only paid on the principal balance each given period

adford River Resort opened for business on June 1 with 10 deluxe villas Its trial balance before justment on August 31 is as follows Account Number 101 126 130 140 141 149 201 208 275 311 332 429 622 726 732 RADFORD RIVER RESORT Trial Balance August 31 2022 Cash Supplies Prepaid Insurance Land Buildings Equipment Accounts Payable Unearned Rent Revenue 6 7 Mortgage Payable Common Stock Dividends Rent Revenue Maintenance Repairs Expense Salaries and Wages Expense Utilities Expense Debit 19 600 3 300 6 000 150 000 750 000 120 000 5 000 3 600 51 000 9 400 1 117 900 Credit 15 500 12 400 660 000 350 000 80 000 1 117 900 In addition to those accounts listed on the trial balance the chart of accounts for Radford River Resort also contains the following accounts and account numbers No 112 Accounts Receivable No 142 Accumulated Depreciation Buildings No 150 Accumulated Depreciation Equipment No 212 Salaries and Wages Payable No 230 Interest Payable No 619 Depreciation Expense No 631 Supplies Expense No 718 Interest Expense and No 722 Insurance Expense Other data 1 Insurance expires at the rate of 300 per month 2 A count on August 31 shows 800 of supplies on hand 3 Annual depreciation is 24 000 on buildings and 6 000 on equipment 4 Unearned rent revenue of 4 800 has been earned 5 Salaries of 400 were unpaid at August 31 Rentals of 4 000 were due from tenants at August 31 The mortgage interest rate is 9 per year The mortgage was taken out on August 1 Instructions a Journalize the adjusting entries on August 31 for the 3 month period June 1 August 31 b Prepare a ledger using the three column form of account Enter the trial balance amounts and post the adjusting entries Use J1 as the posting

6000 are invested in a bank account at an interest rate of 8 percent per year Find the amount in the bank after 11 years if interest is compounded annually Find the amount in the bank after 11 years if interest is compounded quarterly Find the amount in the bank after 11 years if interest is compounded monthly Finally find the amount in the bank after 11 years if interest is compounded continuously 2

Statins are used to keep cholesterol in check and are a top selling drug in the U S The equation S 1 3x 6 estimates the amount of sales S of statin in billions of dollars X years after January 1 2014 What was the monetary amount in sales of statin on January 1 2020 In what year will statin sales reach 24 2 billion dollars Write your final answers using a complete sentence Reminder the sentence is not for explaining how

Julia Dumars is a licensed CPA During the first month of operations of her business Skysong Inc the following events and transactions occurred May 1 2 3 7 11 12 17 31 a 31 Stockholders invested 22 300 cash in exchange for common stock Hired a secretary receptionist at a salary of 2 500 per month Purchased 1 600 of supplies on account from Vincent Supply Company Paid office rent of 750 cash for the month Completed a tax assignment and billed client 2 100 for services performed Received 2 900 advance on a management consulting engagement Received cash of 1 500 for services performed for Orville Co Paid secretary receptionist 2 500 salary for the month Paid 40 of balance due Vincent Supply Company Julia uses the following chart of accounts No 101 Cash No 112 Accounts Receivable No 126 Supplies No 201 Accounts Payable No 209 Unearned Service Revenue No 311 Common Stock No 400 Service Revenue No 726 Salaries and Wages Expense and No 729 Rent Expense

Yahoo Finance reports a beta of 0 6 for a stock If the risk free rate is 0 6 and the expected market risk premium is 5 8 what is this stock s expected return according to the CAPM

Suppose you enter into a forward contract to sell 15 000 pounds of orange juice in January 2023 at a forward price of 129 3 cents per pound If the spot price of orange juice on maturity date turns out to be 121 0 cents per pound what would be your payoff per pound at maturity as the short position in this contract Show one decimal place Hint The answer may be negative or positive depending on the comparison of the forward and spot prices

1 Name the two types of risks 2 What are three categories of pure risk 3 List common methods of risk manage 4 What is the main purpose of insuranc 5 What information is typically stated on insurance policy

Lorna sends her son Mikey to buy a winter coat priced at 950 selling for a discount of 16 2 3 plus 8 875 NY State sales tax She gives him 25 550 20 10 and 5 bills that will almost pay for the coun Mikey will make up the difference a minimal amount from his allowance How many bills of each denomination might Lorna have given Mikey How much does Mikey pay

1 The simple interest on a certain sum at 5 per annum for 3 years differ by 82 Find the sum 2 Rajan s monthly income is 20 more than the monthly income of Sarita What per cent of Sarita s income is less than Rajan s monthly income and 4 years 3 A machine is sold by A to B at a profit of 10 and then B sold it to C at a profit of 20 If C paid 1200 for the machine what amount was paid by A to purchase the machine

Choose 2 multinational companies 1 U S based company 1 foreign based company Visit the websites of the 2 companies and conduct research using databases such as Business and Company ASAP and Business Source Complete How do these 2 multinational companies have organized their global business operations What are their similarities and differences and what might explain those similarities and differences How might you characterize their business and international strategies

Assuming no employees are subject to ceilings for their earnings Harris Company has the following information for the pay period of January 15 31 Use this information to answer the question that follows Gross payroll 18 800 Social security rate 6 0 Medicare rate 1 5 Federal income tax withheld 2 041 Federal unemployment tax rate 0 8 State unemployment tax rate 5 4 Salaries Payable would be recorded in the amount of Oa 15 593 40 Ob 15 349 00 c 14 183 40

A company had total revenues of 132 million operating profit margin of 19 and depreciation and amortization expenses of 16 million over trailing twelve months The company concurrently has 37 million in total debt and 13 million in cash equivalents If the company s market capitalization market value of its equity is 536 million what is its EV EBITDA ratio Round to one decimal place

You are trying to value a company using the relative valuation approach Suppose comparable companies are trading at an average trailing EV EBITDA multiple of 7 9 The company you are valuing generate an EBITDA of 236 million over the last twelve months has 493 million of debt 41 million in cash and 16 million shares outstanding What is the company s implied share value Round to one decimal place

Find the payment that should be used for the annuity due whose future value is given Assume that the compounding period is the same as the payment period 5 000 quarterly payments for 4 years interest rate 3 2

What is the NVP of a project that costs 50 000 today and is expected to generate annual cash inflows of 7 000 for the next 9 years followed by a final inflow of 12 000 in year 10 Cost capital is 8 Round to the nearest whole dollar Hint Notice that the inflows constitute a combined annuity covered at the end of Chapter 2 TVM So when calculating the PV of inflows you will need to find the PV of the annuity with n 9 AND the PV of the 12 000 as a single cash flow with n 10

Huity due whose future value is given Assume that the compounding period is the same as the payment period 5 000 quarterly payments for 4 years interest rate 3 2 OA 291 83 B 236 60 C 59 79 D 61 80 GELECE

A company has agreed to pay 4 8 million in 5 years to settle a lawsuit How much must it invest in an account paying 8 annual interest compounded monthly to have that amount when it is du What is the interest rate per period Type an integer or decimal rounded to four decimal places as needed GIOCOD

You d like to save 2 000 million How much should you save each year for the next 20 years in order to reach this goal Assume your savings will earn a 5 annual return Round to the nearest dollar

What is the future value of 20 000 after 12 years 12 years earning 1 6 compounded monthly Round to the nearest whole number

Supposed you are planning to invest 1 000 You d like to grow your investment of 2 000 If your investment earns an annual return of 5 compounded monthly how many years will it take to reach your goal Round to one decimal place

What is the present value of 14 000 to be received in 8 years if your discount rate is 5 Round to the nearest cent

If I deposit 10 000 into an account earning an interest rate of 1 5 how much will I have in the account after 10 years Round to the nearest cent two decimal places no sign

Consider an amortized loan of 60 000 at an interest rate of 6 4 for 12 years What is the total interest owed Round to the nearest dollar

If you borrow 36 000 from a bank for 6 years at an interest Ralf 9 5 how much will you owe in balloon payment at the end of the loan s term This balloon loan with all payment due at the end Round to the nearest dollar

Supposed you are planning to deposit 4 000 in a bank account You d like your deposit to grow to 7 000 in 4 years If interest in the account compounds weekly what annual interest rate do you need Answer in percentage and round to one decimal place

If you deposit 14 000 each year for the next 12 years into an account paying 2 6 how much in interest will you earn over that that time period Answer in dollars rounded to a whole number

Someone you know needs loan and she is willing to pay you back 16 000 in exactly 7 years If you d like to earn 4 9 compounded annually on this loan how much you be willing to loan her today Round to the nearest dollar

Solve the problem Round to the nearest cent nt A P 1 F P A OA 7 870 98 OB 2 500 00 OC 9 419 05 nt A Pet Y 1 1 James and Susan wish to have 10 000 available for their wedding in 4 years How much money should they set now at 6 compounded monthly in order to reach their financial goal

A bank offers a CD that pays a simple interest rate of 8 How much must you put in this CD now in order to have 12 480 to replace all the windows in your house in 7 years OA 4 480 OB 8 960 C 8 000 D 448

The principal P 2000 is borrowed at simple interest rate r 7 for a period of time t 1 year Find the simple interes owed for the use of the money Assume 360 days in a year and round to the nearest cent OA 285 71 OB 21 51 OC 140 00 OD 70 00

Company makes and sells a product that regularly sell for 38 95 each The following information is available for the current year Annual maximum capacity in units Current annual production in units Budgeted absorption cost per unit Direct materials Direct labor Manufacturing overhead 70 variable 6 500 6 200 9 95 2 65 3 40 A new customer approached the company with a one time all or nothing order for 500 units The special order unit identical to the regular ones with one exception the customer would like their business logo engraved on each unit It will cost S engrave the logo Q The minimum total sales revenue from the special order that would be acceptable to the A company is

olby has made deposits of 186 00 into his savings account at the end of every three months for 14 years If interest is 12 per annum compounded monthly and he leaves the accumu alance for another 4 years what would be the balance in his account then The balance in his account would be Round the final answer to the nearest cent as needed Round all intermediate values to six decimal places as needed

Majestic Manufacturing sold Jordans Furniture a living room set for an 8 700 list price with 40 trade discount The 200 freight FOB shipping point was not part of the list price Terms were 5 10 n 30 ROG The invoice date was June 19 Jordans received the goods on August 07 and paid the invoice on August 09 What was the final price include cost of freight of the living room set Note Round your answer to the nearest cent Final price

A file that is 274 megabytes is being downloaded If the download is 15 2 complete how many megabytes have been downloaded Round your answer to the nearest tenth megabytes X

8 Find the lump sum that one must invest in an annuity to receive 1 000 at the end of each month for the next 15 years if the annuity pays 4 5 compounded monthly Number of periods n a Lump Sum rate per period i b How much interest is earned over the fifteen year period

Suppose that 2000 is invested at a rate of 4 8 compounded monthly Assuming that no withdrawals are made fin the total amount after 10 years Do not round any intermediate computations and round your answer to the nearest cent

Example A sample consist of consist of 9 observations Find P10 P20 and P60 No 1 2 234567 3 4 5 8 10 12 14 16 13 18 17 15 Pio Bo Solve Solve at at Home Home

Suppose you invest 180 a month for 8 years into an account earning 10 compounded monthly After 8 years you leave the money without making additional deposits in the account for another 24 years How much will you have in the end Suppose instead you didn t invest anything for the first 8 years then deposited 180 a month for 24 years into an account earning 10 compounded monthly How much will you have in the end

Use PMT nt 3 1 n Round to the nearest dollar Suppose that you decide to buy a car for 25 278 including taxes and license fees You saved 6 000 for a dov payment and can get a five year loan at 6 52 Find the monthly payment and the total interest for the loan OA 377 3 342 OB 495 4 422 OC 377 17 442 D 612 17 442

Use PMT T OA 2 726 OB 3 076 OC 2 456 OD 2 576 nt to determine the regular payment amount rounded to the nearest dollar 1 The price of a home is 390 000 The bank requires a 10 down payment After the down payment the balance is financed with a 30 year fixed rate mortgage at 8 Determine the monthly mortgage payment excluding escrowed taxes and insurance to the nearest dollar

For its back to school sale Freda s Books marked down its entire stock of classic novels 60 from 4PM to 6PM on Saturday only Their sale price during this time is 12 99 What will the regular selling price be after 6PM

Calculate the simple interest and maturity value Note Do not round intermediate calculations Round your answers to the nearest cent Principal 6 200 Interest rate 3 Time 12 month Simple interest Maturity value