Quiz 3

1) Use the table below for problem 1.

a) (5 points) Suppose Tim is a single man who has a taxable income of \$42,000 per year. Use the table on the left to calculate Tim’s Federal taxes for the year. Show all work/ calculations.

b) (2 points) What is Tim’s effective tax rate? Show all work/ calculations.

2) (5 points) Bob invests \$280 per month into an account that gives 1.9% annual interest, how much will Bob have in the account after 20 years? Solve the problem by hand using the appropriate formula, and show all work.

3) (5 points) I invest a large sum of money into an account that gives 2.8% annual interest compounded monthly. I leave the money in the account for 30 years. At the end of the 30 years I now have \$315,700. How much did I originally invest? Solve the problem by hand using the appropriate formula, and show all work.

4) I find a house that is selling for \$325,000. The bank offers me a 4.1% APR for the 30-year loan.

a) (5 points) How much will my mortgage payment be each month? Solve the problem by hand using the appropriate formula, and show all work.