Question

QUESTION 11 Dan just received a $2.000 end-of-year bonus from his employer. If he pays a 25 percent marginal tax rate for federal income taxes, his state income tax is 5 percent, and the Social Security tax rate is 7.65 percent, approximately how much of the $2,000 bonus will Dan have left to spend on holiday gifts? a. $2,000 b. 51,400 OC 51,247 O d. 5753 QUESTION 12 Grandmother Smith has just put $12,000 into an investment earning 6 percent a year for her granddaughter's college education. Approximately how much will be in the account in ten years assuming all the interest is left in the account (Use tables in Appendixes Al, A2, A3, A4 of the textbook to answer TVM questions) O. $19,200 b. $21,490 $16,320 d. $21259

Answer 1

Solution :- 14

according to question the amount invested is double in ten years therefore

10000*(1 + r)¹⁰ = 20000

( 1 + r )¹⁰ = 2

( 1 + r ) = 2^1/10

( 1 + r ) = 1.072

r = 0.72 = 7.2% per year

Therefore the correct answer is (B)

Solution :- 13

The Value of House today = $100000

Rate of Value appreciation per year = 3%

hence the value of house after 10 years = $100000*(1+0.03)¹⁰ = $100000 * 1.3439 = $134390

Therefore the correct answer is (A)

Solution :- 12

Amount deposit in the account for eductation = $12000

Rate of Interest = 6%

The total amount in the account after 10 years = $12000* ( 1+ 0.06 )¹⁰

= $12000 * 1.7908 = $21490

Therefore the Correct answer is (B)

Solution :- 11

Bonus Amount = $2000

Marginal Tax = $2000*25% = $500

State Income tax = $2000*5% = $100

Social Security Tax = $2000*7.65% = $153

Net Amount Received = $2000 - 500 - 100 - 153 = $1247

Therefore the Correct answer is (C)