Download Math 113A – Exam Review – Consumer Math

Math 113A – Exam Review – Consumer Math
Checklist of main concepts:
 Calculating & Understanding: Gross Pay, Net Pay, CPP, EI and Income Tax Deductions
 Calculating overtime, tips, and commission
 Budgets – what they are, finding percent of income each category is, how they are affected by
changes in a person’s life
 Calculating the cost of buying an item on a store credit plan
 Calculating the cost of buying items with a credit card
 Calculating the cost of compound and simple interest
 Calculating the cost of borrowing money from a bank
 Calculating the cost of owning a car – ownership and operating costs
 Comparing the cost of leasing and financing a car
Formulas:
 Gross Pay = # hours x hourly wage + (tips, commission or overtime)
 Net Pay = Gross Pay – (total of all deductions)
 CPP = 0.0495 x (Gross Pay – 3500/pay period)
 EI = 0.018 x Gross Pay
 Income Tax: Federal = Gross Pay x 15.5% Provincial = Gross Pay x 9.68%
 Commission and Tips = amount x percent **remember to always make a percent a decimal**
 Overtime (time-and-a-half) = # overtime hours x hourly wage x 1.5
 Finance Charge = Cash Price (including tax) – Credit Price
 Cash Price = Price + 14% tax
The following questions will review the above concepts:
1. Mel works as a carpenter and is paid $15.50/h for a 40 hour work week. If he works more than 40 hours
in one week, he is paid time-and-a-half for his overtime hours. Calculate Mel’s weekly net pay if he
works 50 hours. Use the provincial tax rate of 9.68% and the federal tax rate of 15.5%.
2. Rick works as a waiter in his father’s restaurant. In addition to regular pay of $8.75/hour, Rick keeps
65% of all the tips he receives. Calculate his net weekly pay for a week in which he works 38 hours and
receives $520 in tips. Use the provincial tax rate of 9.68% and the federal tax rate of 15.5%.
3. Use the following terms to fill in the blanks below: Employment Insurance, Canada Pension Plan,
Income Tax, Gross Pay, Net Pay, Overtime, Tips, Commission, Simple Interest, Compound Interest,
Finance Charge, Amortization Period, Ownership Cost, Operating Cost, Leasing, Variable Cost, Fixed
Cost and Principal.
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
k)
l)
m)
n)
o)
p)
q)
r)
Insurance on a vehicle is a type of __________________ cost.
A furniture sales person earns a salary plus _________________ on the furniture he sells.
The amount of a loan is called the ____________________.
A percentage of our earnings called _______________________ goes to the federal and provincial
government to help pay health care, education costs, build roads, etc.
_______________ interest is when the interest earned is given to the person and not kept in the bank.
Time-and-a-half is a type of ________________________.
The difference between what a person pays using an in store credit plan and what they could have
paid with cash is called a ______________________________.
All earnings is called _________________________.
A government plan that pays people some money when they retire is called ____________________.
The length of time a loan is taken out for is called ____________________________.
The cost of gasoline for a vehicle is a type of _______________________.
In your budget rent is a type a _____________________.
If you lose your job or take maternity leave you will be paid ______________________________.
When you earn interest and it is added to the principal it is an example of ______________________.
When the vehicle that you drive belongs to a company you are _______________ the vehicle.
Another name for your take home pay is ______________________.
In Sam’s monthly budget he has budgeted $100 for entertainment. This is an example of a
_____________________.
Jill is paid an hourly wage and then is able to keep 75% of her __________ that she earns as a
hairstylists.
4. Fill in the missing numbers in the following budget sheet. Joe’s monthly net income is $2345.
Expenses
Budgeted Amount
Percent of Net Monthly Income
Food
$300
Housing
$730
Clothing
$250
Utilities
$235
Transportation
$400
Entertainment
$125
Savings
$150
Total
Balance
6. Complete the table to determine the cost of using a Department Store charge account. Credit charges are
2.5% of the balance due.
Month
Oct
Nov
Dec
Jan
Feb
Mar
Previous
Balance
$116.42
$169.30
- Payment
Made
$50.00
$75.00
$75.00
$130.00
$125.00
$60.00
+ Purchases
Charged
$98.75
$28.16
$219.63
$15.40
$27.11
$38.09
= Balance
Due
$165.17
a) What are the total credit charges?
+ Credit
Charges
= New Balance
$276.90
$68.47
$1.21
b) What are the total payments?
7. For each of the following situations find:
 Cash Price (price + tax) – use NB tax of 14%
 Credit Price
 Finance Charge = credit price – cash price
a) Bicycle for $245 OR pay taxes, $25 fee and 6 monthly payments of $45.
b) Refrigerator for $1200 OR pay taxes, $40 fee and 24 monthly payments of $60.
8. Which of the following load options is the best overall ‘deal’ for borrowing a principal of $3500?
a) 7% loan :36 payments of $110
b) 8% loan: 48 payments of $80.
9. Sutherland Honda will sell you a brand new Ridgeline Truck (silver) for the LOW price of $40 520. Here
are two options:
Selling Price
Down Payment
Monthly Payment
Refundable Security Deposit
# of Monthly Payments
Option to Purchase Price
Leasing Plan Financing Plan
$42 060
$48 062.40
$1500
$1500
$725.86
$793.92
$0
$0
60
60
$15 397.60
$0
Total Cost of Leasing =
Total Cost of Financing =
10. If the average cost to drive your car is 39.8¢/km and you drive on average 22 000 km per year, what is
the monthly cost of owning your car?