Financial Math Answers

How much was borrowed if a simple interest rate of 2.10% was offered payable in 4 months with interest of Php35.00?

How many months will it take Php15,000 to earn Php56.25 at 1.5% simple interest rate?

What is the simple interest on a Php500 loan at 2.5% interest to be paid at the end of 6 months?

QUESTION ONE

You are provided with the following information taken from the books of

Mackenzie manufacturing company (MMC) for the month ending 31st

December, 2017.

Costs incurred (Tshs. ‘000)

Depreciation – factory buildings 60,000

Depreciation – office buildings 12,000

Salesmen commissions 52,000

Rent – factory 120,000

Rent-office 90,000

Indirect labour 84,000

Direct raw materials 190,000

Direct labour cost 135,000

Maintenance –factory buildings 36,000

Maintenance –office buildings 22,500

Supplies factory 10,000

Raw materials – 1/12/2017 12,000

Raw materials – 31/12/2017 15,000

Work in process – 1/12/2017 7,500

Work in process – 31/12/2017 30,000

Required;

Prepare the cost statement in good form (15 marks)

a) Discuss the terms residence and domicile as used in taxation

b) What is the importance of residence in payment of taxes?

Opening stock 16000 Sales returns 250000 Purchases 150,000 Closing stock 25000 Staff costs 45000 Profit on exchange 1500 Electricity &water 25000 Profit sale shares 1000 Insurance 10000 Dividends from a wholly Rent and rates 5000 owned subsidiary 1000 Vehicle Expenses 7000 Interest received 500 NSSF 2000 Net loss 11500 Pensions and bonuses 5000 Bank charges and interest 1500 Subscriptions and donations 50 0 Legal Expenses 1000 Postage and telephone 1500 Bad debts 4000 Depreciation 5000 Other expenses 12000 TOTAL 290,50 0 290,500 The following further information is relevant a) Bad debts include an increase in provision of 1000 shillings b) Legal fees include 500 shilling relating to a directors private transaction c) Included in the vehicle expenses is a the cost of an old van valued at ksh 2000 d) Among the pension is 1500 paid to retired staff e) Interest received was from an overseas deposit account f) Included in the donations is ksh 500 to a children’s home calculate the adjusted profit for taxation

Which of the following statements is false for a person wanting to use and file a Form 1040EZ tax return?

a. Taxable income is less than $100,000.

b. No more than 2 dependents, in addition to the taxpayer plus spouse. c. Taxable interest is not over $1,500.

d. Filing status is either single or married filing jointly only.

Sarah had been contributing $300 pre-tax per month to a retirement account that pays 2.16% interest compounded monthly. After 10 years, she needs to withdraw 25% of the money from her account. If the early withdrawal penalty is 10% of the amount withdrawn, how much will she have to pay?

a. $1,003.59 b. $40,143.57 c. $4,014.36 d. $10,035.89

Sergio plans to retire in 15 years. He would like to have $250,000 in his retirement account. If he invests in a plan that pays 4.69% interest compounded monthly, how much should he contribute monthly?

a. $138.89 b. $277.88 c. $959.77 d. $560.23

A father wants to have R16000 available for his sons education on his 18th birthday. Calculate the amount he must invest on his sons 10th birthday at 14% compounded interest?