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Chapter 8: Problem 47
Suppose that the local sales tax rate is \(6 \%\) and you purchase a car for \(\$ 32,800\). a. How much tax is paid? b. What is the car's total cost?
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In Exercises 1-10, a. Find the value of each annuity. Round to the nearest dollar b. Find the interest.$$ \begin{array}{|l|l|l|} \hline \begin{array}{l} \$ 50 \text { at the end of } \\ \text { each month } \end{array} & \begin{array}{l} 6 \% \text { compounded } \\ \text { monthly } \end{array} & 30 \text { years } \\ \hline \end{array} $$
In Exercises 11-18, a. Determine the periodic deposit. Round up to the nearest dollar. b. How much of the financial goal comes from deposits and how much comes from interest? $$ \begin{array}{|l|l|l|l|} \hline \$ \text { ? at the end of each month } & 7.25 \% \text { compounded monthly } & 40 \text { years } & \$ 1,000,000 \\ \hline \end{array} $$
Exercises 3-4 involve credit cards that calculate interest using the average daily balance method. The monthly interest rate is \(1.2 \%\) of the average daily balance. Each exercise shows transactions that occurred during the June 1-June 30 billing period. In each exercise, a. Find the average daily balance for the billing period. Round to the nearest cent. b. Find the interest to be paid on July 1 , the next billing date. Round to the nearest cent. c. Find the balance due on July 1 . d. This credit card requires a \(\$ 30\) minimum monthly payment if the balance due at the end of the billing period is less than \(\$ 400\). Otherwise, the minimum monthly payment is \(\frac{1}{25}\) of the balance due at the end of the billing period, rounded up to the nearest whole dollar. What is the minimum monthly payment due by July 9? $$ \begin{array}{|l|c|} \hline \text { Transaction Description } & \text { Transaction Amount } \\ \hline \text { Previous balance, } \$ 4037.93 & \\ \hline \text { June } 1 \quad \text { Billing date } & \\ \hline \text { June } 5 \quad \text { Payment } & \$ 350.00 \text { credit } \\\ \hline \text { June } 10 \text { Charge: Gas } & \$ 31.17 \\ \hline \text { June } 15 \text { Charge: Prescriptions } & \$ 42.50 \\ \hline \text { June } 22 \text { Charge: Gas } & \$ 43.86 \\ \hline \text { Charge: Groceries } & \$ 112.91 \\ \hline \text { June } 29 \text { Charge: Clothing } & \$ 96.73 \\ \hline \text { June } 30 \text { End of billing period } & \\ \hline \text { Payment Due Date: July } 9 & \\ \hline \end{array} $$
What is the difference between a traditional IRA and a Roth IRA?
A bank bills its credit card holders on the first of each month for each itemized billing. The card provides a 20-day period in which to pay the bill before charging interest. If the card holder wants to buy an expensive gift for a September 30 wedding but can't pay for it until November 5 , explain how this can be done without adding an interest charge.
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