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Nadusha1986 [10]
2 years ago
9

Sally hires a maid to work in her home for $280 per month. The maid is 25 years old and not related to Sally. During 2019, the m

aid worked 9 months for Sally.Do not round immediate computations and round your final answers to two decimal places. a. What is the amount of Social Security tax Sally must pay as the maid's employer? b. What is the amount of Medicare tax Sally must pay as the maid's employer? c. What is the amount of Social Security and Medicare tax which must be withheld from the maid's wages? d. Sally should withhold for Social Security and Medicare tax of ___.
Business
1 answer:
Black_prince [1.1K]2 years ago
3 0

Answer:

Explanation:

Since we know that the current Social Security tax is 12.4% with employees and employers each paying 6.2%; and the Medicare tax rate is 2.9%. Employers and employees split that cost with each paying 1.45%

a. Social Security Tax

Wage per month = 280$

social security tax = ( wage per month x number of months worked) x tax rate

social security tax = ( 280 x 9 ) x 6.20%

social security tax = 156.24 $

b. Medicare Tax

Medicare tax = ( wage per month x number of months worked) x tax rate

Medicare tax = (280 x 9) x 1.45%

Medicare tax = 36.54$

c. Social security and medicare tax withheld

Social Security and Medicare tax = ( wage per month x number of months worked) x tax rate

Social Security and Medicare tax = (280 x 9) x (6.2 + 1.45)

Social Security and Medicare tax = (280 x 9) x 7.65

Social Security and Medicare tax = 192.78$

d. Sally should withhold for social security and medicare tax of 192.78$

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Creating an investment account
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3 years ago
Consolidated Enterprises issues $1 million face value, five-year bonds with a coupon rate of 6.0 percent. At the time of issuanc
valentinak56 [21]

Answer:

$1,035,459.51

Explanation:

First we must determine the issuing value:

  • cash flow 1 = $60,000
  • cash flow 1 = $60,000
  • cash flow 1 = $60,000
  • cash flow 1 = $60,000
  • cash flow 1 = $1,060,000

using an excel spreadsheet to calculate the bond's price with a discount value of 5%:

the bonds were sold at $1,043,294.77

the effective interest expense = bond's price x market interest = $1,043,294.77  x 5% = $52,164.74

bond's value = bond's price - (coupon payment - effective interest) = $1,043,294.77 - ($60,000 - $52,164.74) = $1,035,459.51

8 0
3 years ago
A stock has an expected return of 11.85 percent, its beta is 1.24, and the expected return on the market is 10.2 percent. What m
prisoha [69]

Answer:

The risk free rate is 3.325%

Explanation:

The required rate of return or cost of equity of a stock can be calculated using the CAPM. The CAPM estimates the required rate of return of a stock based on three factors- risk free rate, stock's beta and the market risk premium. The equation of required rate of return under CAPM is,

r = rRF + Beta * (rM - rRF)

Where,

  • rRF is the risk free rate
  • rM is the return on market
  • (rM - rRF) gives us the risk premium of market

We already have the values for r, Beta and rM. Plugging in these values in the formula, we calculate the rRF to be,

Let rRF be x.

0.1185 = x + 1.24 * (0.102 - x)

0.1185 = x + 0.12648 - 1.24x

1.24x - x  =  0.12648 - 0.1185

0.24x = 0.00798

x = 0.00798/0.24

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3 0
3 years ago
Eric works at an electronics store in a mall. Eric doesn't like to work hard, and it costs him $100 to do so. Eric's employer ca
SCORPION-xisa [38]

Answer: work hard; $65; less; $85

Explanation:

The following can be deduced from the question:

The Expected profit from working hard will be:

= (90% × $200) + (10% × $50)

= (0.9 × $200) + (0.1 × $50)

= $180 + $5

= $185

Then, the profit will be the difference between revenue and coat which will be:

= $185 - $100

= $85

Then, the expected profit from shirking will be:

= (90% × $50) + (10% × $200)

= (0.90 × $50) + (0.10 × $200)

= $45 + $20

= $65

Then, the profit will be:

= $65 - $0

= $65

Eric will (work hard) because the net gain of ($65) from shirking is (less) than the net gain of ($85) from working hard.

7 0
2 years ago
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3 0
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