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# BUSN 380 Week 2 Problem Set

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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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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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