math

Taxation

Tax is the money paid to the government for their uses through your taxable income. Taxable income is calculated using total income and allowable deductions, this includes income from all sources throughout the year.Tax deductions may be present that make tax amount less. They include may things like tools used for work and safety equipment. To calculate the tax payable you use a table like the one bellow.

Simple Interest

Question

Bill has a annual salary of $24 710.40 and receives $489.60 from his produce stand, what is...

a)...his total annual income

b)...the amount of tax he has to pay (using the tax table) .

c)...If Bill had already paid $2000 in tax (PAYG Pay As You Go) how much does he receive in a tax refund.

a)...total annual income

$24710.40+$489.60

=$25200

b)...amount of tax he has to pay (using tax table)

$25200-$18200

=$7000

$7000x$0.19

=$1330

To find total annual income you must add the yearly salary to the money from other sources to get a total of $25200.

To find the amount of tax he has to pay, you must first look at the tax table to see what category the amount of money falls under. In this case it falls under the second category(19c for every $1 over $18200). You must then subtract $18200 from the total annual income to get the tax deductible money. Then multiply this number by $0.19 to get a total of $1330tax

When you invest your money in an institution like a bank, the bank pays you to use your money. This doubles over,as when you borrow money from the bank you have to pay to use their money. This payment is called interest. Interest is calculated as a percentage of amount borrowed or invested. If interest is calculated as a fixed percentage of original amount invested or borrowed it is simple interest. the rule for simple interest is: Interest = Principal × Rate × Time

c)...If Bill had already paid $2000 in tax (PAYG Pay As You Go) how much does he receive in a tax refund?

$1330-$2000

=$270

To find tax refund you must know the tax amount. You must subtract the tax from the money paid (PAYG) to get a total of $270

Working

Interest is the total amount of interest paid,

Principal is the amount lent or borrowed,

Rate is the percentage of the principal charged as interest each year. The rate is expressed as a decimal fraction, so percentages must be divided by 100. For example, if the rate is 15%, then use 15/100 or 0.15 in the formula.

Time is the time in years of the loan.

Question

Bill has $9000 that he wants to invest. Calculate...

a)...how much money he has in total if he invests at 6.9%p.a for 3 years

b)...how much interest he receives if he invests at 4%p.a for 18 months

Bill wants to BORROW $9000 from the bank. Calculate...

a)...how much interest he will have to pay at 7%p.a for one year

b)...his total interest rate if he has to pay a total of $9540

a)...how much money he has in total if he invests at 6.9%p.a for 3 years

$9000x6.9%

=$621

$621x3

=$1863

$9000+$1863

=$10863

b)...how much interest he receives if he invests at 4%p.a for 18 months

$9000x4%

=$360

$360 2

=$180

$180+$360

=$540

.

To find the total amount, you first have to find the interest by multiplying the interest rate (6.9%) by the amount invested($9000). Then multiply the interest by 3 (time), then add this to the original amount invested($9000) to equal $10836.

To find the interest you must multiply the amount invested by interest rate (4%) to find a yearly interest. then you must divide that amount by two to get a six monthly earning. Add this to your yearly interest and you have an 18month interest total of $540.

a)...how much interest he will have to pay at 7%p.a if invested for 1 year

$9000x7%

=$630

b)...his total interest rate if he has to pay a total of $9540

$9540-$9000

=$540

540

9000

=6%p.a.

x 100

To find interest for one year you must multiply the interest rate (7%) by the money borrowed to equal $630.

To find interest rate you must first subtract the amount borrowed from the amount payed to find tax. Then to find the percentage you must divide or put the tax over the amount payed and multiply by 100 to equal 6%p.a.

Working

What is Financial

Maths?

The world of Finance is packed to the brim with mathematics formulas, equations and models. When you think of financial maths you think of things like tax and interest and money, lots and lots of money. This follows on to the assumption that a financial mathematician is an accountant or in a like-field. These assumption are all correct. Financial maths is the field of applied mathematics that concerns with financial markets.

Financial Maths in society

Earning Money

Financial maths will be used by everyone at certain times when they leave school. Whether it be that they become an accountant or builder, engineer or teacher they need to use it to calculate pay for themselves or for others. Without financial mathematics the world of money would be a shambles.

There are many different ways for a person to earn income whether it be labor, knowledge or skill. Whist most people earn money by working for an employer, those who work for themselves (the employer), owning a business, charge a fee.

Question

Bill is paid $13.20 per hour and works a 36-hour week. How much does he earn per...

a)...week?

b)...fortnight?

c)...year?

d)...average month?

Question

Bill works as an accountant for the Jennings family. It is the end of financial year and the Jennings have given Bill 3 receipts stating the money they have claimed. They are $25 from a donation , $75 from a dry cleaning bill and $100 from a utensils bill

a)Calculate the money they can claim altogether

b)If the Jennings earn $500 per week

i.their total annual income

ii.how much tax will they have to pay (including deductions)

-ignore low tax income offset

a)$25+$75+$100

=$200

Number of hours worked in a week

Number of weeks in a year

a) ...per week

$13.20x36

=$475.20

Pay per hour

Half the number of weeks in a year

c)...per year

$475.20x52

=$24710.40

or

$950.40x26

=24710.40

To find weekly earnings multiply

the pay per hour by the hours worked in a week to get a total of $475.20 per week.

To find yearly earnings you can either multiply the weekly earnings by the number of weeks in a year (52) or multiply the fortnightly earnings by half the weeks in a year (26) to equal $24710

I have added the three claims together to get a total of $200

working

d)...average month

$24710.40÷12

=$2059.20

b)...per fortnight

$475.20x2

=$950.40

To find the fortnightly earnings you must multiply the weekly earnings by two (as a fortnight is two weeks) to get a total of $950.40.

To find AVERAGE monthly earnings you have to divide the yearly earnings by the number of months in a year (12) to get $2059.20.

b)

i. $500x52

=$26000p.a.

ii.$26000-$200

=$25800

$25800-18200

=7600

7600x$0.19

=$1444

I have multiplied the weekly earning by the number of weeks in a year (52) to get annual income.

I have subtracted the claims from the total annual income to get a total of $12800. To get tax I have subtracted $18200 from total annual income-claims to get $7600. I then multiplied this by $0.19

This is just a video explaining values

Financial math