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tigry1 [53]
3 years ago
11

John worked 43 hours last week. His hourly rate is $9.00. He has the following deductions taken from his pay: Social Security ta

x at the rate of 6.2 percent, Medicare tax at the rate of 1.45 percent, health insurance premiums of $15.00, and 401(k) contributions of 5 percent of gross pay. John also has federal income tax withheld at the rate of 10 percent. Federal taxes do not apply to the 401(k) contribution. John’s net pay for last week was what? Please keep keep in mind the overtime hours beginning at 40 and overtime rate being 1.5 times more than usual pay.
Business
1 answer:
DochEvi [55]3 years ago
4 0

Net pay is calculated by subtracting deductions from Net Pay.

In this case:

Gross Pay is 40 hours X $9/hr (regular pay) PLUS 3 hours X (13.50 -- 1.5 times the normal pay) for overtime

Once you have Gross Pay, you multiply that by the percentages given for the deductions and subtract that total from Gross Pay.

One note, in this case, federal taxes are not withheld from the amount given to 401(k). So to figure the taxes you would:

(Gross Pay - 401(K) contribution) X 10%

Gross Pay - deductions = net pay

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Consider the following scenario analysis:Rate of Return Scenario Probability Stocks BondsRecession 0.20 -4 % 16 %Normal economy
Vikentia [17]

Answer and Explanation:

a. Here it is reasonable to presume that the treasury bond generates high returns when there is a recession.  

b. The calculation of the expected rate of return and the standard deviation for each investment is shown below:

For stocks

= (Expected return of the boom × weightage of boom) + (expected return of the normal economy × weightage of normal economy) + (expected return of the recession × weightage of recession)  

= (29% × 0.30) + (18% × 0.50) + (-4% × 0.20)  

= 8.7% + 9% - 0.80%

= 16.9%

For bonds  

= (Expected return of the boom × weightage of boom) + (expected return of the normal economy × weightage of normal economy) + (expected return of the recession × weightage of recession)  

= (6% × 0.30) + (9% × 0.50) + (16% × 0.20)  

= 1.8% + 4.5% + 3.2%

= 9.5%

Now the standard deviation calculation is to be shown in the excel spreadsheet

For the stock it is 11.48%

And, for the bond it is 3.5%

c. The investment that should be prefer could be computed by determine the coefficient of variation which is shown below:

Formula i.e. used is

= Standard deviation ÷ expected return

For stock, it is

= 16.9% ÷ 11.48%

= 1.47

And, for bonds it is

= 9.5% ÷ 3.5%

= 2.71

Since for the bonds the coefficient of variation is greater so the same is to be considered

Therefore the bond should be prefer

4 0
3 years ago
The two-year interest rate is 10% and the expected annual inflation rate is 5%.
vesna_86 [32]

In economics, the Fisher equation is used to determine the relationship of the nominal interest rate and the real interest rate. This equation takes into account the effect of inflation. Mathematically this is expressed as:

Real rate = \frac{1+Nominal rate}{1+Inflation} -1

The values given are:

Nominal rate= 10% = 0.1

Inflation=5%=0.05

Substituting known values and by calculation:

<span>Real rate=0.0476 = 4.76%</span>


7 0
3 years ago
Shanken corp. issued a 30-year, 5.9 percent semiannual bond 6 years ago. the bond currently sells for 108 percent of its face va
bazaltina [42]

The pre-tax cost of debt is yield to maturity of the debt.

The yield to maturity of debt is calculated as -

Yield to maturity = ]Coupon payment + ( Face value - Current price) / Number of years)] / [ ( Face value + Current price) / 2]

Here,

Coupon payment = $ 29.50 (semi-annual, thus 5.9% / 2 * 1000)

Face value = $ 1,000

Price = $ 1,000 * 108% = $ 1,080

Number of years = 12 ( semi-annual, thus 6 years * 2)

Pre-tax cost of debt = [ 29.50 + (1,000 - 1080/12)] / [ (1000+1080)/2 ]

Pre-tax cost of debt = 2.196 %

Annual pre-tax cost of debt = = 2.20 % * 2 = 4.40%

After tax cost of debt = ( 1 - tax rate ) * Annual pre-tax cost of debt

After tax cost of debt = ( 1 - 35%) * 4.40 %

After tax cost of debt = 2.86 %

6 0
3 years ago
Bob and mary are financing $180,500 for a new home. their lender will approve an interest rate of 5% if bob and mary pay two dis
nata0808 [166]

Bob and mary are financing $180,500 for a new home. their lender will approve an interest rate of 5% if bob and mary pay two discount points at closing. Cost them is $3,610.

A discount point is 1% of the loan amount. Bob and Mary are paying two points (or 2% of $180,500), which is $3,610.

What is discount points?

  • Discount points are a shape of paid ahead of time intrigued that contract borrowers can buy to lower the intrigued rate on their consequent month to month payments.
  • Discount points are a one-time expense, paid up front either when a contract is to begin with orchestrated or amid a refinance.
  • Each markdown point for the most part costs 1% of the overall credit and brings down the loan’s intrigued rate by one-eighth to one-quarter of a percent.
  • Points don’t continuously got to be paid out of the buyer’s stash; they can some of the time be rolled into the advance adjust or paid by the vender.

To know more about discount points visit:

brainly.com/question/14329985?

#SPJ4

4 0
1 year ago
If a monopsonist offers a wage of $6, he finds that 1,200 people are willing to work for him. This means that the:
lbvjy [14]

If a monopsonist offers a wage of $6, he finds that 1,200 people are willing to work for him. This means that the: a marginal factor cost is $6.

<h3>Monopsonist</h3>

If a monopsonist offers a wage of $6, he finds that 1.200 people are willing to work for him. This means that the O a. total wage cost is $1,200. b. marginal factor cost is $6. O c. total wage cost is $7.200. o d. $6 wage is too high. o e marginal factor cost is $200.

Learn more about monopsonist here :

brainly.com/question/27750664

#SPJ4

7 0
2 years ago
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