CM3TakeHome

MATH 1332 College Mathematics, Fall 2010 Name ________________________________ Exam 3, Part II (take - home) Instructor: Merianne Prickett Due: 7:05 pm, Tuesday, November 20 Instructions: This exam has 10 problems on 5 pages. Take a moment to check that you have a complete exam. Work each problem in the space provided and circle your final answer. To receive full credit for a problem, you must clearly show all of your work. You may attach additional pages, if needed, but please direct me where to find your work. Please put your name on each page and staple the pages together before turning in your exam. Round all dollar amounts to the nearest penny and round all percentages to the nearest hundredth of a percent, unless otherwise indicated. This exam is worth 53 points toward your overall score. Point values for each problem are indicated. PLEASE BE SURE TO READ THE INSTRUCTIONS CAREFULLY! Vocabulary. Fill in the blank with the appropriate word or phrase . (5 points) 1) a. __________________________________ is interest paid only on the original principal, and not on any interest added at later dates. b. The ___________________________ in financial formulas is the balance upon which interest is paid. c. The ____________________________ is the actual percentage by which a balance increases in 1 year. d. ______________________________ is interest paid both on the original principal and on all interest that has been added to the original principal. e. The amount of interest a bond pays each year divided by the bond's current price is the __________________________ of a bond. f. A loan that you pay off with equal regular payments is called a(n) ____________________________ loan. g. All of your income for the year including wages, tips, profits from a business, interest or dividends from investments is called your _____________________ income. h. If you buy an item (such as property or stock) at one price and later sell it at a higher price, the profit is called a _____________________________. i. A _________________________ is subtracted from the final amount of tax that you owe. j. _____________________________ is the amount of your income that is actually taxed.

MATH 1332, Exam 3 take - home, Fall 2010 Page 2 of 5 Answer the question. 2) (2 pts) Elena spends $4 per day on coffee at the neighborhood cafe and $320 per month on food. On an annual basis, the amount Elena spends on coffee is what percent of the amount she spends on food? Answer the question. 3) (4 pts) You intend to create a college fund for your baby. You can get an APR of 3.0% and you want the fund to have a value of $101,570 after 17 years. How much should you deposit monthly? Solve. 4)Suppose you take out a car loan for $14,000 at a fixed APR of 7% over a period of 4 years. a. (4 pts) What is your monthly payment? b. (2 pts) How much total interest do you end up paying on the loan?

MATH 1332, Exam 3 take - home, Fall 2010 Page 4 of 5 Solve. 8)a. (2 pts) Tim is in the 35% tax bracket and claims the standard deduction. How much will his tax bill be reduced if he qualifies for a $945 tax credit? b. (2 pts) Vanessa is in the 35% tax bracket and itemizes her deductions. How much will her tax bill be reduced if she makes a $945 contribution to charity? For problems 9 - 10, refer to the following tables as necessary. 2009 Margin Tax Rates, Standard Deductions, and Exemptions Tax Rate* Single Married Filing Jointly Married Filing Separately Head of Household 10% up to $8350 up to $16,700 up to $8350 up to $11,950 15% up to $33,950 up to $67,900 up to $33,950 up to $45,500 25% up to $82,250 up to $137,050 up to $68,525 up to $117,450 28% up to $171,550 up to $208,850 up to $104,425 up to $190,200 33% up to $372,950 up to $372,950 up to $186,475 up to $372,950 35% above $372,950 above $372,950 above $186,475 above $372,950 standard deduction $5700 $11,400 $5700 $8350 exemption (per person)** $3650 $3650 $3650 $3650 *Each higher marginal rate begins where the prior one leaves off. 2009 FICA Tax Rates Tax Rate Wages 7.65% up to $106,800 1.45% $106,800 or more 9)Your deductible expenditures are $8234 for interest on a home mortgage, $2614 for contributions to charity, and $610 for property taxes. Your filing status is married filing jointly. a. (1 pt) What is the amount of your standard deduction? b. (2 pts) What is the amount of your itemized deduction? c. (2 pts) Should you itemize your deductions rather than claiming the standard deduction? If so, what is the difference between the two deductions?

MATH 1332, Exam 3 take - home, Fall 2010 Page 5 of 5 10)Joleen is filing as Head of Household with one dependent child. In 2009, she will earn a salary of $64,000. Additionally, she earned $1500 in interest from a savings account., and she contributed $3000 to a tax - deferred retirement fund. Her itemized deductions total $5480 and she is eligible for a tax credit of $2000. a. (1 pt) What is Joleen's gross income? b. (1 pt) What is her adjusted gross income? c. (1 pt) What is her taxable income? d. (4pts) How much income tax does she owe? e. (3 pts) What is Joleen's FICA tax for 2009?