Learning Objectives

# Problem 1 of 3

David is paid $11.50 an hour for a 35-hour week. He worked 39 h this week as shown below:

(a) If he receives time-and-a-half for the hours he works over 35, how much did he earn?

(b) If he receives time-and-a-half only for the hours he works over 8 in a day, how much did he earn?

(c) Dave's only deductions are CPP, EI and income tax. Given the rates below, calculate Dave's Net Pay using the gross pay from (a) and (b) above.

CPP: 4.9%

EI: $1.87 per $100

Income Tax: 15.25%

**Solution**

**(a) **Step 1****

Basically determine his hours into overtime and regular hours.The overtime hours is anything exceeding his 35 hour week.

**Step 2**

Multiply his hourly rate into the amount of hours he worked during the week.

**Regular hours:**

35*11.50= $402.50

**Overtime hours: **

4*11.50*1.5=$69

**Step 3**

Simply add what he earned during overtime hours and regular hours.

**Regular** =$402.50

**Overtime**= $69

Gross Income= Regular + Overtime

Gross Income= 402.50 + 69

Gross income= $471.50

Therefore, during the span of one week David earned $471.50, if he receives time-and-a-half for the hours he works over 35.

**(b)**Step 1****

Basically determine his hours into regular and overtime hours. The overtime hours is anything beyond his 8 hour day.

**Hours** | **Mon** | **Tues** | **Wed** | **Thur** | **Fri** |

**Regular** | 7 | 8 | 7 | 8 | 6 |

**Overtime** | 0 | 1 | 0 | 2 | 0 |

**Step 2**

Multiply his hourly rate into the amount of hours he worked during the week

**Regular hours:**

36*11.50= $414.00

**Overtime hours: **

3*11.50*1.5=$51.75

**Step 3**

Simply add what he earned during overtime hours and regular hours.

**Regular** =$414

**Overtime**= $51.75

Gross Income= Regular + Overtime

Gross Income= 414 + 51.75

Gross income= $465.75

**(c)**Step 1****

In this question since he has no other deductions except Income tax, EI and CPP.

**Gross PAy=Taxable Income**.Now, we need to find the income tax first.

For (a)

Taxable Income*Income tax Rate= Income Tax

471.50*0.1525= **$71.90**

For(b)

Taxable Income*Income tax Rate= Income Tax

465.75*0.1525=**$71.03**

**Step 2**

Find the CPP contribution.

For (a)

Gross pay*CPP rate= CPP Premium

471.50*0.049=**$23.10**

For (b)

Gross pay*CPP rate= CPP Premium

465.75*0.049=**$22.82**

**Step 3**

Find the EI Premium.

For (a)

Since there are 4 one hundreds so,

4*1.87=**$7.48**

71.50/100=0.715

1.87*0.715=**$1.34**

EI Premium=**$8.82**

For (b)

Since there are 4 one hundreds so,

4*1.87=**$7.48**

65.75/100=0.6575

1.87*0.6575=**$1.23**

EI Premium=**$8.71**

**Step 4**

Find the Net Pay

For (a)

Net Pay= Taxable income-Income tax-EI Premium-CPP Contribution

Net Pay= 471.50-71.90-23.10-8.82

**Net Pay=$367.68**

For (b)

Net Pay= Taxable income-Income tax-EI Premium-CPP Contribution

Net Pay=465.75-71.03-22.82-8.71

**__Net Pay=$363.19__**

# Problem 2 of 3

Assume the current annual interest rate is 6%. Calculate the compound amount, after one year, of a deposit of $1000 if the interest is compounded:

(a) annually

(b) monthly

(c) daily.

(d) How long will it take for this investment to double in each case above?

**Solution**

To determine the interest if the interest is compounded annually, you'll need to multiply 6% (6/100= 0.06) and 1000.

a) **annually**= (1000)(0.06)

To determine the interest if the interest is compounded monthly, you'll need to divide 1000 by 12 because there are 12 months in a year.

b) **monthly**= (1000)(0.06)

# Problem 3 of 3

coming soon ...

**Solution**

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