Formulas
Cost (100% + %Markupcost)
What is Selling Price with Markup based on Cost
Cost of goods sold (or services) plus overhead expenses.
What are operating expenses?
24 paychecks per year
What is the number of times you will be paid if SEMIMONTHLY?
360 days
How many days to factor when using ordinary interest?
The concept that money "now," or in the present, is more desirable than the same amount of money in the future because it can be invested and earn interest as time goes by.
What is the time value of money?
(Hourly rate) x (Overtime factor) x (Overtime hours worked)
What is Overtime pay?
Based on cost and based on selling price.
How are markups and markdowns expressed?
The total amount of earnings due an employee before payroll deductions are withheld.
What is gross pay?
The total payback of principal and interest of a loan.
What is Maturity Value?
The amount of money that must be deposited today at compound interest to provide a specified sum of money in the future.
What is the present amount or present value?
Principal x Rate x Time
The COST of an item.
What is the selling price minus the markup (or the wholesale price for a retailer)?
$128,400
What is the Social Security wage base (for class purposes only)?
The actual interest rate charged on a discounted note.
What is the true or effective interest rate?
The real rate of return on an investment.
What is the annual percentage yield (APY) or effective rate?
(Total compound interest earned in 1 yr) / Principal
What is Annual Percentage Yield (APY)?
What is the original selling price of a bike, which is currently on sale for $235.88 after a 30% markdown?
OP = (235.88) / (100% - 30%) = $336.97
Martin's Music Shop pays incremental commissions of 3.5% on sales up to $100,000 and 4.5% on sales greater than $100,000. What is the gross pay of an employee selling $164,000?
Gross pay1 = 100,000 x 0.035 = $3,500
Gross pay2 = 64,000 x 0.045 = $2,880
Total Gross Pay = $6,380
Using ordinary interest method, what is the amount of interest on a $7,500 loan at 9% for 120 days?
I = PRT = 7500 x 9% x (120/360) = $225
How many compounding periods and what is the rate per period for an investment that has a 12% interest rate compounded quarterly for 7 years?
#Compounding Periods = 7 x 4 = 28 periods
Rate per period = 12% / 4 = 3%
P(1+i)n
What is Compound Amount?
What is the most a gift store can pay for a vase if it will have a selling price of $65.50 and a 45% markup based on selling price?
Cost = 65.50 (100% - 45%) = $36.03
What are the FICA tax withholdings for social security and Medicare for an employee with gross earnings of $760 per week?
SS rate 6.2% up to the $128,400 wage base.
MC rate 1.45% with NO wage base.
SS = $760 x 6.2% = $47.10
MC = $760 x 1.45% = $11.02
What is the maturity value of a loan for $50,000 at 12% interest for 3 years?
MV = P(1+RT) = $50,000 (1+(12%)(3)) = $68,000
PV = 12,000 / (1+0.03)40 = $3,678.68