Problem Set 2
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.
