Wages
The number of weeks in a year for wages
52
The number of weeks in a year for salaries
52.18
Define 'retainer'.
Money paid to a salesperson without regard to their sales. Money for turning up, to get them through hard times when there are no sales (eg. rainy weather)..
You are paid by the item made or the service given.
Holiday pay is also called L---- L------
Leave Loading
Jon buys a laptop for $3000. He paid a 10% deposit. How much is the deposit and how much is the balance?
Deposit = 300.
Balance = 3000 - 300 = $2700
What is the formula for Simple Interest?
I = Prn
Interest = Principal x Rate x Time
What is the formula for compound interest?
A = P( 1 + r)n
What is the difference between the formula for compound interest and the formula for depreciation?
Same formula except depreciation has a minus sign
Bill earned a salary of $50000 this financial year plus $2000 in dividends from shares. He had allowable tax deductions of $100 for his guard dog and $350 for his sunglasses. What is his taxable income?
Taxable income = gross income - deductions
= 50000 + 2000 - 100 - 350
= $51550
A wage is paid how often
Weekly, fortnightly or monthly. Not yearly.
Lisa's annual salary is $100 000. Her weekly pay is
100000 / 52.18 = $1916.44
Jo earns a weekly retainer of $500 and is paid 10% of is sales as commission. How much is he paid for a week where he sells $600 worth of goods?
500 + 60 = $560
You are paid $40 for each lawn you mow. How much will you earn in a week where you mow 8 lawns?
40 x 8 = $320
4 weeks normal pay
What kind of interest is charged when buying on terms?
Simple Interest
Ben buys a phone for $600. He pays 10% pa simple interest over 2 years. How much interest does he pay?
I = Prn
I = 600 x 10% x 2
I = $120
What does the A stand for in the formula?
Final Amount
That is, Principal + Interest
Write the formula for depreciation
A = P( 1 - r)n
What is the meaning of taxable income?
Gross income minus tax deductions, rounded down to the nearest dollar.
Your salary is $30 000.
The tax table rule is "19c for every $1 over $18200"
How much tax do you pay?
extra income = 30 000 - 18200 = 11800
tax = 0.19 x 11800 = $2242
Lorna is paid a weekly wage of $250. Her earnings in 4 weeks are
250 x 4 = $1000
Give 2 differences between a salary and a wage
A salary is calculated on a fixed annual amount. For example, a salary of $80 000 per year. A wage is not. It is based on an agreed amount for a shorter period, like a week or month.
People on salary are not paid overtime while people on wages can get overtime.
Ella is paid a commission of 0.5% of sales. How much commission does she receive on sales of $1000
0.5% of 1000 = $5
You deliver newspapers for 5 cents each.
How many newspapers do you have to deliver to make $100?
20 × 100 = 2000 newspapers
Jill earns $20 per hour for a regular 38 hour week. Find how much she earns for 4 weeks.
20 x 38 x 4 = $3040
What is the formula for Simple Interest?
I = Prn
Interest = Principal x Rate x Time
Toby invests some money at 10% pa for 2 years and earns $80 in simple interest. The amount of money invested was:
I = Prn
80 = P x 10% x 2
P = $400
$10 is invested for 30 years at 5% pa, compounding yearly. Find the final amount of the investment and the interest earned.
A = P(1 + r)n
A = 10( 1 + 5%)30
A = $43.22
I = A - P
I = 43.22 - 10 = $33.22
Annie buys a new bike for $5000. It will depreciate at 10% per year. Find the bike's value after 2 years.
A = P (1 - r)n
A = 5000( 1 - 10%)2
= $4050
What is income tax?
Your taxable income is $60 000.
The tax rule is "$5092 plus 32.5 c for each $1 over $45000"
How much tax do you pay?
extra income = 60000 - 45000 = 15000
tax = 5092 + 0.325 x 15000
= $9967
Dell earns $50 per hour. The number of hours it takes him to earn $350
7 hours
Which is the bigger commission?
1%
Or
0.85%?
1%
Jack earns $200 per week. Find his 17.5% leave loading on 4 weeks pay.
17.5% of 4 x 200 =$140
Jon has a balance of $2700. What is the total interest charged at 7% pa over 3 years?
Barney invests $1000 at 5% pa for 9 months. Find the simple interest earned
I = Prn
I = 1000 x 5% x 9/12
I = $37.50
A principal of $20 000 is invested at 3.6% pa for 4 years with interest compounding half-yearly. What is the total value of the investment after 4 years?
COMPOUNDING HALF YEARLY = every 6 months
4 years => 4 x 2 = 8 half-years
3.6% pa => 3.6%/2 = 1.8% per half-year
A = 20 000( 1 + 1.8%)8
A = $23068.12
Depreciation means
Define tax deductions
The cost of doing business, that can be used to reduce your taxable income, so in turn you pay less tax.
Gross income - tax deductions = taxable income
Define PAYG tax
Pay As You Go tax.
Regular amounts are deducted from your pay throughout the year in order to gradually pay off your tax bill for the year.
Can you get overtime if you are on a wage?
Yes
True or false: To find total holiday pay, add 4 weeks normal pay and the leave loading
True
Why is it cheaper to pay cash rather than buy on terms?
Buying on terms involves paying interest.
What does 'P' stand for in the formula?
Principal. The original amount invested (or borrowed).
What is the difference between simple interest and compound interest?
For simple interest, the amount of interest is the same every time.
For compound interest, the amount of interest increases each time period (as the interest is added to the principal to make a new bigger principal).
Fred bought his truck for $50 000.
3 years later it was worth $20 000.
By how much did it depreciate?
50 000 - 20 000 = $30 000
What is a progressive tax system?
The more income you have, the more tax you pay
Define net income.
Net income = gross pay - tax and other deductions.
Also called take-home pay.