# Finance Review

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```					Math 11F                                                                April 1, 2009
Finance Review

1. Richard has a bi-weekly gross income of \$834.00 bi-weekly plus straight
commission of 4.5% on sales of \$10,000 each week.
a. Calculate his gross biweekly income

\$10,000 x 0.045 = \$450 weekly x 2 = \$900 commission bi-weekly

\$900.00 commission + \$834.00 salary = \$1734.00 bi-weekly gross pay

b. Calculate his gross annual income

\$1734.00 bi-weekly gross pay x 26 pays per year
= \$45,084.00 gross annual income

c. Calculate his EI and CPP contributions for the year

EI: \$45,084.00 x 1.73% = \$45,084.00 x 0.0173
= \$779.95 annual EI contribution

CPP: (\$45,084.00 - \$3500) x 4.95% = \$41,584 x 0.0495
= \$2058.41 annual CPP contribution

d. Calculate his Federal and Provincial Taxes for the year

Provincial: Column 2: \$45,084.00 - \$29,590 = \$15,494
\$15,494 x 14.95% = \$15,494 x 0.1495 = \$2316.35
\$2316.35 + \$2600.96 = \$4917.31 annual NS taxes

Federal: Column 2: \$45,084 - \$38,832 = \$6252
\$6252 x 22% = \$6252 x 0.22 = \$1375.44
\$1375.44 + \$5825 = \$7200.44 annual Federal taxes

e. Determine his net annual income

\$45,084 annual gross income
- \$779.95 annual EI contribution
- \$2058.41 annual CPP contribution
- \$4917.31 annual NS taxes
- \$7200.44 annual Federal taxes
\$30,127.89 annual net income
f. Find his net monthly income

\$30,127 annual net income / 12 monthly pay periods per year
= \$2510.58 monthly net income

2. Richard has estimated the following expenses:

- Mortgage payment: \$832.89/month            - Utilities: \$214.00/month
- Groceries: \$75/week                        - Car Payment: \$276.55/month
- Loan Payment: \$163.90/month                - Miscellaneous: \$100/week

a. Find his total expenses for one month

Groceries: \$75/week = \$300/month
Miscellaneous: \$100/week = \$400/month

total expenses = \$832.89 + \$300 + \$163.90 + \$214 + \$276.55 + \$400
= \$2217.34 monthly expenses

b. Find his savings for one month

\$2510.58 net monthly income - \$2217.34 monthly expenses
= \$293.24 monthly savings

3. Richard just got a raise. His new gross income is \$884.00 bi-weekly plus straight
commission of 4.5% on sales of \$10,000 each week.

a. Follow steps a-f in question 2 to find his new net monthly income
i. Calculate his new gross biweekly income

\$10,000 x 0.045 = \$450 weekly x 2 = \$900 commission bi-weekly

\$900.00 commission + \$884.00 salary
= \$1784.00 bi-weekly gross pay

ii. Calculate his gross annual income

\$1784.00 bi-weekly gross pay x 26 pays per year
= \$46,384.00 gross annual income
iii. Calculate his EI and CPP contributions for the year

EI: \$46,384.00 x 1.73% = \$46,384.00 x 0.0173
= \$802.44 annual EI contribution

CPP: \$46.384.00 > \$46,300 therefore
\$2118.60 annual CPP contribution

iv. Calculate his Federal and Provincial Taxes for the year

Provincial: Column 2: \$46,384.00 - \$29,590 = \$16,794
\$16,794 x 14.95% = \$16,794 x 0.1495 = \$2510.70
\$2510.70 + \$2600.96 = \$5111.66 annual NS taxes

Federal: Column 2: \$46,384 - \$38,832 = \$7552
\$7552 x 22% = \$7552 x 0.22 = \$1661.44
\$1661.44 + \$5825
= \$7486.44 annual Federal taxes

v. Determine his net annual income

\$46,384 annual gross income
- \$802.44 annual EI contribution
- \$2118.60 annual CPP contribution
- \$5111.66 annual NS taxes
- \$7486.44 annual Federal taxes
\$30,864.86 annual net income

vi. Find his net monthly income

\$30,864.86 annual net income / 12 monthly pay periods per year
= \$2572.07 monthly net income

b. If his expenses stay the same, how much will he save per month now?

\$2572.07 monthly net income - \$2217.34 monthly expenses
= \$354.73 monthly savings

c. If he can save that amount each month, how much will he have saved in
two years?

\$354.73 per month x 24 months in two years
= \$8513.52 saved in two years
ved in two years

```
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