The Social Security Administration increased the taxable wage base from $107,300 to $108,900. The 6.2% tax rate is unchanged. Joe Burns earned over $120,000 each of the past two years. 
a. 
What is the percent increase in the base? (Round your final answer to the nearest hundredth percent.) 
Pat Maninen earns a gross salary of $3,900 each week. Assume a rate of 6.2% on $110,100 for Social Security and 1.45% for Medicare. 
a. 
What are Pat’s first week’s deductions for Social Security and Medicare? (Round your answers to the nearest cent.) 

Social Security and Medicare tax:
Have different rates  
Are paid only by employees  
Are based on the number of dependents not claimed  
Are paid by only the employer  
None of these 
Rates cannot change  
State rates will always be lower  
Rate varies with employment record  
FUTA will increase  
None of these 
Weekly period rates  
Biweekly payroll rates  
Semimonthly payroll rates  
Monthly payroll rates  
All of these 
$8,200  
$6,200  
$4,240  
$4,420  
None of these 
Len Mast earned $2,300 for the last 2 weeks. He is married, is paid biweekly, and claims 3 exemptions. What is Len’s income tax? Use the percentage method. (Use Table 9.1 and Table 9.2). (Round your answer to the nearest cent.) 
Income tax  $ 
Morris Leste, owner of Carlson Company, has three employees who earn $580, $645, and $805 per week. What are the total state and federal unemployment taxes that Morris owes for the first 11 weeks of the year and for week 30? Assume a state rate of 5.6% and a federal rate of 0.8%. (Leave no cells blank  be certain to enter "0" wherever required. Round your answers to the nearest cent.) 
State taxes owed  $ 
Federal taxes owed  $ 
Taxes owed for week 30  $ 
Leslie Hart borrowed $15,100 to pay for her child’s education at Riverside Community College. Leslie must repay the loan at the end of 16 months in one payment with interest. 
a. 
How much interest must Leslie pay? (Do not round intermediate calculation. Round your answer to the nearest cent.) 
Interest  $ 
b. 
What is the maturity value? (Do not round intermediate calculation. Round your answer to the nearest cent.) 
Maturity value  $ 
Bill Moore is buying a used Winnebago. His April monthly interest at 12.90% was $129.00. What was Bill’s principal balance at the beginning of April? (Use 360 days a year. Do not round intermediate calculations.) 
Principal balance  $ 
On April 5, 2014, Janeen Camoct took out an 8.75% loan for $25,000. The loan is due March 9, 2015. Sabrina Bowers took out the same loan as Janeen. Sabrina’s terms, however, are exact interest. (Use Days in a year table.) 
a. 
What is Sabrina’s difference in interest? (Do not round intermediate calculations. Round your answer to the nearest cent.) 
Difference  $ 
b. 
What will she pay on March 9, 2015? (Round your answer to the nearest cent.) 
Amount  $ 
Max Wholesaler borrowed $5,000 on a 12%, 120day note. After 45 days, Max paid $1,750 on the note. Thirty days later, Max paid an additional $1,500. Use ordinary interest. 
a. 
Determine the total interest use the U.S. Rule. (Do not round intermediate calculations. Round your answers to the nearest cent.) 
Total interest amount  $ 
b. 
Determine the ending balance due use the U.S. Rule.(Do not round intermediate calculations.Round your answers to the nearest cent.) 
Ending balance due  $ 
Debbie McAdams paid 12% interest on a $17,500 loan balance. Jan Burke paid $10,575 interest on a $112,500 loan. Based on 1 year: 
a.  What was the amount of interest paid by Debbie? 
Interest paid by Debbie  $ 
b.  What was the interest rate paid by Jan? (Round your answer to the nearest tenth percent.) 
Interest rate paid by Jan  % 
c. 
Debbie and Jan are both in the 28% tax bracket. Since the interest is tax deductible, how much will Debbie and Jan each save in taxes? (Round your answers to the nearest cent.) 
Debbie  Jan  
Save in taxes  $  $ 
Joyce took out a loan for $21,900 at 12% on March 18, 2013, which will be due on January 9, 2014. Using ordinary interest, Joyce will pay back on Jan. 9 a total amount of:
rev: 08_24_2013_QC_ 34268
$2,167.10  
$24,068.10  
$24,038.40  
$2,138.40  
None of these 
With interest of $1,832.00 and a principal of $16,000 for 206 days, using the ordinary interest method, the rate is:
20%  
12%  
2%  
10%  
None of these 
Calculate the discount period for the bank to wait to receive its money: (Use Days in a year table): 
Date of note  Length of note  Date note discounted  Discount period 
September 11  45 days  October 5  days 
Solve for maturity value, discount period, bank discount, and proceeds. Assume a bank discount rate of 10%. Use the ordinary interest method. (Use Days in a year table.) (Do not round intermediate calculations. Round your final answers to the nearest cent.) 
Face value (principal) 
Rate of interest 
Length of note 
Maturity value  Date of note 
Date note discounted 
Discount period  Bank discount  Proceeds 
$29,000  8%  50 days  $  February 5  March 7  days  $  $ 
Assume the $10,000 Treasury bill, 5% for 13 weeks. Calculate the effective rate of interest. (Use calendar year. Round your answer to the nearest hundredth percent.) 
Effective rate of interest  % 
You were offered the opportunity to purchase either a simple interest note or a simple discount note with the following terms: $29,059 at 8% for 12 months. 
a. 
Calculate the effective interest rate. (Do not round intermediate calculations. Round your final answer to the nearest tenth percent.) 
Effective interest rate 
b.  Based on the effective interest rate, which would you choose?  

The Treasury Department auctioned $29 billion in 3month bills in denominations of $10,000 at a discount rate of 5.700%. 
What would be the effective rate of interest? (Use calendar year. Do not round intermediate calculations. Round your answer to the nearest hundredth percent.) 
Effective rate of interest  % 
Toyota Motor Corporation has faced tough times after losing production due to natural disasters. This, coupled with the yen’s appreciation against the dollar, has Toyota anticipating net profits 51% lower than last year. If Toyota had a ¥18,000 note at 1.5% interest for 340 days, what would Toyota’s proceeds be if it discounted the note on day 220 at 3%? (Round your final answer to the nearest yen.) 
Proceeds  ¥ 
True  
False 
The principal of a promissory note is the face value.
True  
False 
The maturity date of a promissory note represents when only the principal is due.
True  
False 
Proceeds of a simple discount note equals amount borrowed minus bank discount.
True  
False 
A simple discount note results in:
Lower interest costs than a simple interest note  
Same interest costs as a simple interest note  
Interest deducted when note is paid back  
Interest deducted in advance  
None of these 
Subject  Mathematics 
Due By (Pacific Time)  08/18/2014 08:30 pm 
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