BUSN380 Week 2 TCO 2 Problem Set 2

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. 11. 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