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### Finance

1. 1. Finance Math 20 Pure <br />By Nikole Mantai <br />
2. 2. Canada Pension Plan(CPP)<br />3.2% after the first \$3500<br />Formula <br />CPP=(annual income-3500)*0.032<br />Example<br />Chloe make 69245per year. What is her CPP per month??<br />(\$69245-\$3500)*0.032=\$2103.84 per year<br />\$2103.84/12=\$175.32<br />Chloe has to pay \$175.32 to her Canada pension plan per year. <br />
3. 3. Employment Insurance(EI)<br />2.7% of your annual income to a max of \$1053 per year<br />Formula <br />(EI)=(annual income)(0.027)<br />Example <br />Haylee makes \$45698 per year. What is her EI per month??<br />EI=(\$45698-\$3500)(0.027)=\$1139.35<br />*Haylee makes \$1139.35 which is more than what you have too pay per year so she only has to pay \$1053 per year.<br />So...\$1053/12=\$87.75<br />
4. 4. Taxable Income(Gross income)<br />Formula <br />Taxable income=(gross income-tax exempt deductions)<br />Tax exempt deductions<br />Union due/profession dues<br />RPP(registered pension plan)<br />Through a bank<br />RRSP(registered retirement savings plan)<br />Through the government <br />Child care expenses <br />
5. 5. Taxable Income(Gross income)<br />Example <br />Stewie has a gross income of \$59876 per year. He has \$30.00 per month of<br />union dues. And has 1347.95 CPP per year. He also pays 295.87 per month for<br />RRSP. What is his taxable income??<br />Gross income-\$59876.00<br />Union dues-(\$30.00*12)per year =\$360<br />CPP-\$1347.95per year<br />RRSP-(295.87*12)per year=\$3550.44<br />Gross income-union dues-CPP-RRSP=taxable income<br />\$59876-\$360.00-\$1347.95-\$3550.44=\$54617.61<br />Stewie has a taxable income of \$54617.61.<br />
6. 6. Basic Personal Tax Credit<br />Deductions granted for each dependant<br />For education expenses<br />Formula <br />Tax credits=Basic personal tax credit + CPP + EI<br />Example<br />Karli has a basic personal tax credit of \$2000.00 per year due to education expenses, \$1200.00 per year to CPP and \$875.00 per year to EI. What is the total of her tax credits?? What is her taxable income if she makes \$30 000 per year with these deductions??<br />Tax credits=\$2000.00+\$1200.00+\$875.00=\$4075.00 per year<br />Taxable income=\$30000.00-\$4075.00=\$25925<br />
7. 7. Provincial Tax<br />In Alberta the provincial tax is 45.5% of the basic federal tax <br />Federal tax<br />1st 29590=17%<br />2nd 29590=26%<br />3rd balance=29%<br />Example- Chase makes \$79325.97. what is his federal and provincial tax??<br />\$29590*0.17=\$5030.30 Federal tax=\$10118.49per year<br />\$29590*0.26=\$7693.40 provincial tax=\$8447.54per year<br />\$20145.97*0.29=\$5842.33<br />
8. 8. Foreign Exchange<br />Example <br />Kaitlyn is planning a trip to California nine months from now for her and her friend Jenn. Her air fare is \$623.00 Canadian round trip with no stops. Their hotel room for the trip is \$999.99 American. They will be going to Disneyland for 4 days which will cost \$201.00 per person American. And they want \$1000.00 each spending money for their trip. What will they have to pay per month for their trip?? And how much will they have too save for spending money a month??(Canadian??)<br />Air fare-\$623.00*2=\$1246.00 exchange rate- 1.00 USD = 0.988649 CAD<br />Hotel room-\$999.99(0.988649/1)=\$988.63<br />Disneyland- \$201.00*2=\$402.00(0.988649/1)=\$397.44<br />Trip/per month=1246.00+988.63+397.44=\$2632.07/9months=\$292.45per month Canadian <br />Spending money=\$1000.00/9=111.11per month to be put away for spending money.<br />
9. 9. Income and Earning <br />Gross income-earnings before tax and deductions<br />Net income-earnings after tax and deductions(take home pay)<br />Gratuities-tips(money made on top of base income)<br />Straight commission-income as a percentage of goods sold<br />Salary and commission-earnings are based on standard salary plus a percentage of goods sold<br />
10. 10. Income and Earning <br />Sales quota-must sell x amount per day/<br />week/month to earn salary<br />Graduated commission-earn a percentage of the first \$x sold then a different percentage on the rest<br />Piece work-paid per service<br />
11. 11. Interest and Annuities<br />Simple interest is I=p*r*t<br />principle-amount owing or invested <br />Rate-percent <br />Time-years<br />When interest is paid at regular intervals and added to the next interest period is called compound interest. <br />Formula <br />C=interest rate/#of compounds per year <br />A=P(1+i)^n<br />A=amount <br />P=principle <br />I=rate of interest-annual rate #of compounding periods per year<br />N=number of compounding periods in all<br />
12. 12. Consumer Credit Calculating instalment costs<br />down payment=____% of retail price<br />Amount to be financed=retail-down payment<br />Finance charge=total monthly payments-amount financed<br />Total cost=down payment + total monthly payments<br />Example<br />Brandon bought a truck for \$17975 he put 17% down and agreed to \$60 per month for 85 months. What amount did he finance?? What was the total price of the truck??<br />\$17975*0.17=\$3055.75 <br />\$17975-3055.75=14919.25 amount financed<br />\$17975-\$14919.25=\$3055.75<br />\$17975+3055.72=21030.75 total amount payed<br />
13. 13. Calculating Interest on Retail Credit <br />Balance due=previous balance-payments + purchases.<br />Credit charge ___%of balance due <br />New balance=balance due + credit charge <br />Minimum line of credit payments<br />New balance=previous + interest+ purchases- payments<br />Minimum payment=___% of new balance<br />
14. 14. Housing Costs<br />Mortgage-an agreement between you and a lender to purchase a property<br />Amortize-to reply the mortgage over a given period in equal periodic payments<br />Amortization period the period of time agreed to upon securing the mortgage<br />Term-length of time the mortgage is in effect<br />
15. 15. Methods <br />Method one <br />Table <br />Example<br />7.69per every \$1000. on 120000=120*7.69=922.80<br />Method two <br />Graphing calculator<br />N=number of payments<br />I%= interest rate<br />PV= purchase value <br />PMT=payment <br />FV=future value<br />P/Y= payment per year<br />C/Y= compound per year <br />PMT: END BEGIN<br />
16. 16. Property Tax <br />Formula <br />Property tax=(assessed value/1000)*mill rate<br />Example a house is assessed at \$495000 and has a mill rate of 11.541 find the monthly property tax. <br />PT=(\$495000/1000)*11.541=\$5712.80/12=\$476.07per month <br />