Question

Those questions are related to Financial Mathematics:

1. Mario’s regular pay is $23.00 per hour. The regular workweek is 40 hours, and overtime is paid at time-and-a-half the regular hourly rate. If Mario worked 46.5 hours last week, what were his gross earnings?
2. You are buying a pack of milk (priced at 3.49CAD) and paper towels (priced at 6.99CAD) in a grocery store in Ontario. Only paper towels are subject to HST in Ontario. How much would be your total bill at the grocery store?
3. The CPI was 125.2 for 2014. Determine the purchasing power of the Canadian dollar for the 2014 and interpret the meaning of the result.
4. Calculate the net price of an item, worth $5,000, after three trade discounts of 20%, 10%, and 5%.
5. Calculate the amount of interest on $1560 earning 7% p.a., starting on October 1, 2018, for the next 10 months.
6. On January 15, Sheridan Service received a shipment with an invoice dated January 14, terms 4/10 E.O.M., for $2592. On February 9, Sheridan Service mailed a cheque for $1392 in partial payment of the invoice. By how much did Sheridan Service reduce its debt?
7. Compute the face value of a 90-day promissory note dated October 22, 2018 that has a maturity value of $76,386.99 and an interest rate of 7.5% p.a.
8. Scheduled payments of $1010 due five months ago and $1280 due today are to be repaid by a payment of $615 in four months and balance in seven months. If money is worth 7.75% p.a. and the focal date is in seven months, what is the amount of the final payment? (Hint: Set the size the final payment be $x. Set up an equality of amount which supposed to be payed due today and the repaid amount.)

Answer 1

1). Regular pay (P) = 23 per hour; overtime pay (OT) = 1.5*P = 1.5*23 = 34.5 per hour

Number of hours worked (N) = 46.5 hours; regular work hours (H) = 40 hours, so overtime hours (OH) = N - H = 46.5 - 40 = 6.5 hours

Total gross earnings = (P*H) + (OT*OH) = (23*40) + (34.5*6.5) = $1,144.25

2). HST in Ontario for 2019 = 13%

Total bill = price of milk + price of paper towels*(1+HST) = 3.49 + 6.99*(1+13%) = 3.49 + 7.89 = $11.39

3). Currently, CPI base year for Canada is 2002 when CPI was indexed to 100. So, what could be bought for CAD100 in 2002 will cost CAD125.2 in 2014.

If CPI in 2014 is 125.2 then purchasing power in 2014 is:

100% - (CPI in 2002)/(CPI in 2014)% = 100% - (100/125.2)% = 100% - 79.87% = 20.13%

This means that the Canadian dollar has 20.13% less purchasing power in 2014 as compared to 2002.

4). Price after 1st discount of 20% (P1) = P0*(1-20%) = 5,000*(1-20%) = 4,000

Price after 2nd discount of 10% (P2) = P1*(1-10%) = 4,000*(1-10%) = 3,600

Price after 3rd discount of 5% (P3) = P2*(1-5%) = 3,600*(1-5%) = 3,420

The net price after the three discounts will be $3,420

5). Interest earned in 10 months will be principal*interest rate p.a.*10/12 = 1,560*7%*10/12 = $91