Sullivan’s Handbags marks up their bags at 45% of the
selling price. Pat Sullivan saw a bag at a trade show that
she would sell to her customers for $85. What is the most
she could pay for the bag and still retain the 45% markup
of the selling price?
6. Jeff Jones earns $1,200 per week. He is married and claims four withholding allowances. The FICA rate is as follows:
Social Security rate is 6.2% on $97,500; Medicare rate is
1.45%. To date his cumulative wages are $6,000. Each
paycheck, his employer also deducts $42.50 for health
insurance. What is his net pay? (Calculate FIT by the
7. Lisa Kane borrowed $8,000 on an 8%, 60-day note. After
15 days, Lisa paid $2,000 on the note. On day 45, Lisa paid
$1,000 on the note. What is the total interest and ending
balance due by the U.S. rule? Use ordinary interest.
8. On May 12, Bob Campbell accepted a $5,000 note in granting a time extension of a bill of goods bought by Rick Ween.
Terms of the note were 8% for 120 days. On July 8, Bob
needed to raise cash and discounted the note at Rick’s bank at a discount rate of 9%. Calculate Bob’s proceeds.
9. Jacob Fonda deposited $25,000 in a savings account at 10% interest compounded semiannually. At the beginning of
Year 4, Jacob deposits an additional $40,000 at 10% interest compounded semiannually. At the end of six years, what is
the balance in Jacob’s account?
10. Roger Fox made deposits of $900 semiannually to Reel Bank, which pays 6% interest compounded semiannually. After
seven years, Roger made no more deposits. What would be
the balance in the account eight years later from the last
11. Dick Hercher borrowed $7,000 to travel to London. His loan is to be paid in 48 monthly installments of $190. At the end of 14 months, Dick decides to pay off his loan. What is the
final payoff Dick will make?
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