BUSN 380 BUSN380 Week 2 Problem Set 2 Solution
BUSN 380 Week 2 Problem Set 2
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?
2. What would be the net annual cost of the following checking account?
Monthly fee, $3.75; processing fee, 25 cents per check; checks written, an average of 22 a month
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?
4. A payday loan company charges 4 percent interest for a two-week period. What would be the annual interest rate from that company?
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.
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