Markups Markdowns free essay sample

Based on your findings above, how much would you save if you knew ahead of time that you needed a total of 33 fans for the year by buying them all in the winter? 1. ) For this question the first step is to take the selling price of the fans in the summer time which is $55 dollars and multiply it by the amount of fans needed for the summer which is 15 fans; 55 x 15 = $825. 00 dollars is the total price for the fans in the summer. We next need to find out how much the total price will be for the 18 fans in the winter time so we multiply the selling price which is $55 dollars by the amount needed in the winter which is 18. 5 x 18 = $990. 00 dollars is the total price for the fans in the winter before the discount Next we need to apply the 20% discount to the selling price. So as we start this process the first step is to convert the 20% into decimal format by dividing by 100; 20 / 100 = 0. 20 Then we multiply the total price of the fans in the winter which is $990 by the 0. 20 to find the discount amount. 990 x 0. 20 = $198 dollars is the discount amount To find the final selling price of the fans in the winter with the 20% discount applied we subtract the discount amount of $198 from the total selling price of fans in the winter which is $990. 90 – 198 = $792. 00 is the amount of the 18 fans ordered in the winter with the discount applied. The last step in this process to find the total amount of the 15 fans ordered in the summer and the 18 fans ordered in the winter with the discount applied we need to add the final price that we reached for the fans ordered in the summer which was $825. 00 to the final price of the fans ordered in the winter with the discount applied which was $792. 00. 825 + 792 = $1617. 00 is the total price paid for fans in the summer and the winter with the winter discount applied. 2. For this question we must calculate and compare how m uch we would save when buying all 33 fans in winter compare to buying them at two separate times. We do this by first taking the amount of the selling price and multiplying it by the amount of fans needed. 33 x 55 = $1815. 00 is the total amount of the 33 fans without the discount applied The next step in this process is to take the 20% discount and convert it to decimal form by dividing by 100 20 / 100 = 0. 20 Now we take the $1815. 00 and multiply it by the 0. 20 to find out the discount amount. 1815 x 0. 20 = $363. 00 is the 20% discount in dollars Finally we take the total price of the $1815. 00 and subtract the discount which is $363. 00 1815 – 363 = $1452. 00 is the total price if all 33 fans were bought in the winter. Now that we have the final price of both equations we take the original price of fans bought in the summer and winter and subtract the amount of fans only bought in the winter 1617 – 1452 = $165. 00 dollars is the amount saved by purchasing all the fans in the winter. Part II: Open / Closed End Credit It’s time to go shopping! You grab your Best Purchase credit card, which has an annual interest rate of 18%. The unpaid balance on your card for the current billing cycle is $285. 76. On your shopping trip, you purchase four items: a Blu-ray player, two 4-GB flash drives, and a 19-inch flat-screen television. You purchase all the items with your credit card for a total of $352. 18. When the bill comes at the end of the month, you decide to pay the entire total balance. 1. What is the monthly interest rate on the card? 2. What are the interest charges on the card? (Calculate only on last month’s unpaid balance. ) 3. What is the total balance on your card? (Round all your answers to the nearest hundredth or cent. 1. ) To find out the monthly interest rate we must take the annual interest rate of 18% and divide by 12 18 / 12 = 1. 5% is the monthly interest rate on the card 2. ) To find out what the interest charges on the card from only last month’s unpaid balance we must take last month’s balance of $285. 76 and multiply it by the 1. 5% monthly interest rate, but before w e do that we must convert the1. 5% monthly interest rate into decimal format by dividing by 100 1. 5 / 100 = . 015 Then we multiply the. 015 by the unpaid balance to find out the interest amount 285. 76 x . 015 = $4. 864 rounded $4. 29 is the monthly interest charge of 1. 5% 3. ) To find out the total balance on the card we must first add the unpaid balance plus the new charges; 285. 76 + 352. 18 = $637. 94 is the total balance on the card without interest included To include the interest we must now multiply the 637. 94 by the 1. 5% monthly interest because in the scenario we decided to pay it off in full. So, we must first convert the 1. 5% to decimal by dividing by 100, 1. 5 / 100 = . 015 Now we multiply the . 015 by the 637. 94 to find out the total interest for the month 637. 94 x . 015 = $9. 691 or $9. 57 is the total interest for the month The last step is to add the interest to the 637. 94 to find out the total amount on the card including interest for pay off this month 637 . 94 + 9. 57 = $647. 51 is the final total balance on the card. Part III: Simple Interest Student loans are a hot discussion topic today both in the news and at home. Those of us with student loans, and also those of us thinking about getting a student loan for ourselves or a family member, need to think about paying back not only the initial borrowed amount, but also the interest on top of the loan. For example, subsidized Stafford Loans do not start accumulating interest while a student is in school, and the student does not need to make any payments during that time. After the student has been out of school for six months, the interest then starts to accumulate on the loan, and the student must begin making regular monthly payments. Student loans are also not forgivable in bankruptcy. * Give a realistic student loan amount for an individual that attended a university for at least 2 years. (You may choose to use the total cost of tuition for your program at CTU. * Research and find the current average interest rate for student loans. Be sure to reference the site where you found your interest rate. A. ) For the first part we need to provide a realistic loan amount for a college tuition for 2 years, a realistic number could be 8,500 dollars B. ) The current average of interest rates for students loan I researched and found it to be at 3. 4%. (Webley) Now, assume that the loan yo u chose above is a subsidized Stafford Loan and that you have been out of school for six months are going to begin making your monthly payments. You are starting to really think about your student loan and all of the interest that you will have to pay. * Now that the interest is starting to accumulate on the loan, how much interest will accumulate after one year? * How much interest was charged at the end of the first day? * Do you find this number surprising? A. ) To find out the interest after one year we must take the annual interest rate of 3. 4% and convert it to decimal formal by dividing by 100 3. 4 / 100 = . 034 Now we multiply the . 034 by half of the 8,500 which is 4,250 4250 x . 034 = $144. 0 is the amount of interest annually. B. ) To find out how much interest we must do some division, We must divide the amount of 144. 50 by 365 (the number of days in a year) to find out how much interest there was after the first day 144. 50 / 365 = 0. 3958904109589 or $0. 40 cents per day. After the completion of this equation the amount per day did shock me for being so low, if you were to graduate and find a good paying job b y applying your degree to your job field you could easily pay this money back over the course of 10 years without seeing a huge loss in your income. This is a great way for people to borrow the money they need now for school to live a better life without worrying about paying large lump sums of money back to the loaner for each payment. The loan agency has allowed you to defer the loan for one year if you pay 8% of the original loan today. Therefore, you will not have to make monthly payments for one year, and since your loan is a subsidized Stafford Loan, no interest will accumulate during that year. * What is the amount that you would send the loan agency to defer the loan? * What is the new loan amount? You want to find out how much interest will accumulate on your loan if you decide to make the 8% payment. Find the interest on the new loan amount, after paying 8% off, for one year and then again for one day. * Do you think that making an 8% payment on the loan is worth it when viewing the interest savings at the end of a day and at the end of a year? * Discuss the advantages and disadvantages of deferring the loan for one yea r. A. ) To defer the loan I must pay 8% of the original 8,500 dollar loan balance, so to figure this amount I must first convert the 8% into decimal form by dividing by 100 8 / 100 = . 08 Now we multiply the . 8 by the 8,500 .08 x 8500 = $680. 00 dollars is the amount needed to defer the loan for one year. B. ) To find out the new loan balance we need to subtract the deferment amount of 680 dollars from the original loan balance of 8500 8500 – 680 = $7,820 is the remaining loan amount. C. ) For this scenario we need to find out the interest for one year and one day. First off the was lent for 2 years, minus the amount of the deferment, we must divide the remaining balance of 7,820 by 2 to get the amount left for one year 7820 / 2 = $3,910 dollars is the amount of the loan for one year Now we take the one-year balance and apply the 3. % interest rate for one year, but we must convert the 3. 4% to decimal form by dividing by 100 3. 4 / 100 = 0. 034 Next we multiply the 0. 034 b y the amount of the loan for one year to find the interest for one year’s worth of tuition 3910 x 0. 034 = $134. 94 is the amount of interest for on year of tuition To find the interest for one day we must divide the interest rate per day we must divide the yearly cost of interest by 365 to find out how much it will cost each day 134. 94 / 365 = $0. 36421917808 or $. 36 cents a day. D. Do I think that it is worth it by pay the 8% deferment payment vs. not paying it? Yes, I absolutely think it is worth it. First things first, you save money per day and ultimately per year, NO DEFERMENT PAYMENT DEFERMENT PAYMENT Per Day: $0. 40 Per Day: $0. 36 Per Year: $144. 50 Per Year: $134. 94 With this comparison you can see that the money you pay each day and each year is a lesser amount when you pay the 8% deferment payment vs. not paying it. E. An advantage for deferring the loan is if you are having a temporary financial hardship and you need some time to get back on your feet you can have an entire year before making payments again that will give you ample time to either find employment or obtain some type of government assistance. A disadvantage can be that the time you don’t have to pay can easily lead you to forget about the loan that can lead to serious consequences if they are not paid and or worked out a schedule and amount of payments with the loan company. You can have your taxes taken or even legal justice brought upon you. Part IV Sales tax on the purchase of a vehicle is calculated on the net purchase price, which is the total purchase price minus the amount allowed by a dealer for a trade-in. For residents in Denver, Colorado purchasing a new vehicle, their tax rates are as follows: 1. Colorado State Tax: 2. 90% 2. Regional Transportation District (RTD) tax: 1. 20% 3. Denver City Tax: 3. 62% Using the information above, answer the following: 1. What is the total sales tax to be paid in 2012 on the purchase of a 2012 passenger vehicle with a selling price of $17,000 and a $2,000 trade-in allowance? . How would the sales tax be distributed between the state, the RTD, and the city? 1. ) To find out what the total sales price we must first find out what the net price of the vehicle which is the selling price minus the trade in value, so the selling price of 17,000 minus 2,000 will give us our net purchase price, 17,000 – 2,000 = 15,000 Net Purchase Price Now that we have our net purchase price we apply the first tax of 2. 90%. The first step in doing this is taking the 2. 90% and dividing by 100 to get the decimal form. 2. 90 / 100 = 0. 029 Now we take the 15,000 dollar net purchase price and multiply by the 0. 029 15000 x 0. 029 = $435 dollars is the Colorado State Tax Next we take the 1. 20% percent and also divide by 100 to get the decimal form 1. 20 / 100 = 0. 012 We take the 0. 012 and multiply by the original net purchase price 15000 x 0. 012 = $180 is the RTD Tax Price Next we take the Denver City Tax of 3. 62% and divide that by 100 to get the decimal format 3. 62 / 100 = 0. 0362 Next we multiply this decimal by the 15000 net purchase price 15000 x 0. 0362 = $543 dollars is the Denver City Tax The last step in the process is to take all the taxes and add them together to get the total sales tax cost. 534 + 180 + 435 = $1158 is the total sales tax to be paid. 2. ) To find out how the sales taxes would be distributed we would use the last process before adding them together to find the total State Tax: $435 Dollars RTD Tax: $180 Dollars City Tax : $543 Dollars Part V To find out the salary we must do them separately, First we will do PA. For this one we take the earnings of 50,000 dollars and apply the state income tax of 3% which we must divide by 100 to get the decimal format. / 100 = 0. 03 Now we take the 0. 03 and multiply it by the earnings 0. 03 x 50000 = $1,500 Dollars PA State Tax Now we do the same for MD. We take the earnings of 65,000 dollars and apply the 1. 5% higher tax than PA’s state tax which is 3. 0% which gives us 4. 5%. The first step is to divide by 100 4. 5 / 100 = 0. 045 Next we take the 0. 045 and multiply it by the earnings 0. 045 x 65000 = $2 ,925 Dollars MD State Tax Now to find out what is the assessed value of the house worth 75,000 dollars we must apply all taxes that apply to this purchase. We must apply the property taxes. Now we must divide the other PA Property Tax of 2. 975% by 100 to get decimal form 2. 975 / 100 = 0. 02975 Now we multiply that by the value of the house 0. 02975 x 75000 = $2231. 25 Property Taxes on PA House To find out the assessed value you must add the property taxes to the value of the house 75000 + 2231. 25 = $77231. 25 PA Assessed Value of House Now we switch and do the same for the MD house that’s worth 134,000 and the property taxes of 2. 4% which we must put in decimal form 2. 4 / 100 = 0. 024 Now we multiply that by the value of the house 134,000 x 0. 24 = $3216 Property Taxes on MD House Now we add the property taxes to the value of the house - 134,000 + 3216 = $137,216 MD Assessed Value of House - Now we must find out what the annual purchases are, for PA the state sales tax is 6% which we know it 0. 06 in decimal so we multiply that by the annual purchases of 18,000; 0. 06 x 18000 = $1080 PA State Sales Tax (Annual Purchases) We add that to the annual purchases 1080 + 18000 = $19080 PA Annual Purchases Since MD’s sales tax rate is 1% higher than PA’s that makes it 7% so we know that is equal to 0. 07 in decimal form so we must multiply that by the annual purchases; 0. 07 x 18000 = $1260 MD State Sales Tax (Annual Purchases) Now we add the tax to the annual purchases - 18000 + 1260 = $19260 MD Annual Purchases - To find out the food and clothing expenses we must apply the taxes. I am going to start with PA’s. It remains at 6,000 because the state sales tax rate does not apply to food and clothing 6,000 PA Annual Food and Clothing To find out for MD we already know that the sales tax rate is 7% and it is also 0. 07 in decimal format so we must multiply that by the annual food and clothing cost 0. 07 x 6000 = $420 dollars Now we add that to the annual cost for food and clothing - 420 + 6000 = $6,420 MD Annual Food and Clothing - Now we must find out property taxes, We already know these answers from the worded problem if we read carefully PA Property Taxes = 2. 75 % MD Property Taxes = 2. 4% - Next is the state sales tax, we can find this out by reading the word problem carefully PA State Sales Tax = 6% - MD State Sales Tax = 7% - Next is the State income tax PA State Income Tax = 3% MD State Sales Tax = 4. 5% - PAMDDifference Salary$51,500$67,925MD ^ $16,425 Assessed Value of House$77,231. 25$137,216MD ^ $59,984. 75 Annual Purchases$19080$19260MD ^ $180 Annual Food and Clothing$6,000$6,420MD ^ $420 Property Taxes2. 975%2. 4%PA ^ . 575% Sales Taxes6%7%MD ^ 1% State Income Taxes3%4. 5%MD ^ 1. 5% Cost of Living Based on Taxes$102,311. 25$162,896MD ^ $60,584. 75 1. What is the difference in cost of living between the two locations based on the differences in sales tax, income tax, and property tax? How does this influence which job to choose? 1. ) The difference in the cost of living between the sales taxes is that MD sales tax is 1 % higher. The income tax difference is that MD’s is 1. % higher and the property tax PA’s is . 575% higher. It influences my job choice because I weigh the good and the bad and decipher which one has less amount of an impact on my salary from earning to spending. 2. ) Another factor you can consider when choosing a job is the weather. That can also take into consideration that if it is hotter and dryer climate you may spend more on air conditioning and water versu s if the weather was mostly snow weather you would have to take into consideration rust on your vehicle, warm clothing and heat for your home. . ) I would obviously choose to live in PA because overall even though you make less than compared to MD, the taxes are a smaller amount so if you get a raise the taxes will stay the same. Also that the state sales taxes don’t apply to food and clothing so that is a plus. I would choose to take the job offer in PA because of those reasons. References Webley, K. (n. d. ). Retrieved from http://business. time. com/2012/03/20/students-your-loan-interest-rate-is-about-to-double/