Maria Luna, a 25-year-old nurse, works at a hospital that pays her every 2 weeks by directdeposit into her checking account which pays no interest and has no minimum balancerequirement. She takes home about PHP9,000 every 2 weeks or about PHP18,000 per month.She maintains a checking account in the bank that does not earn any interest income with abalance of around PHP7,500. Whenever it exceeds that amount she transfers the excess intoher savings account, which currently pays 1.5% annual interest. She currently has a savings account balance of PHP85,000 and estimates that she transfersabout PHP3,000 per month from her checking account into her savings account.Maria pays her bills immediately when she receives them. Her monthly bills average aboutPHP9,500, and her monthly cash outlays for food and transportation cost total about PHP4,500,An analysis of Maria's bill payments indicates that on average she pays her bills 10 days early.Bank Time Deposit are currently yielding about 4.2% annual interest. Maria is interested inlearning how she might better manage her cash balances.Give three ways for Maria to better manage her cash balance.

Ways to manage cash balance: Investing current balance in a Time Deposit- Bank Time Deposit is…

Answered: Maria Luna, a 25-year-old nurse, works…

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter7: Deductions And Losses: Certain Business Expenses And Losses

Section: Chapter Questions

Problem 22CE

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June Xu is a registered nurse who earns $3,250 per month after taxes. She has been reviewing her savings strategies and current banking arrangements to determine if she should make any changes. June has a regular checking account that charges her a flat fee per month, writes an average of 18 checks a month, and carries an average balance of $795 (although it has fallen below $750 during 3 months of the past year). Her only other account is a money market deposit account with a balance of $4,250. She tries to make regular monthly deposits of $50–$100 into her money market account but has done so only about every other month. Of the many checking accounts June’s bank offers, here are the three that best suit her needs.• Regular checking, per-item plan: Service charge of $3 per month plus 35 cents per check.• Regular checking, flat-fee plan (the one June currently has): Monthly fee of $7 regardless of how many checks written. With either of these regular checking accounts, she can avoid…
An individual spends $20 per day. Suppose that this person pays for all her purchases using her credit card. She withdraws no money from her bank account until the morning of the fourth day, when she withdraws the whole amount necessary to pay for her credit card purchases over the previous four days.
Kwaku Addo earns $4200 per month take-home pay and has the funds directly deposited in his checking account. He spends only about $3500 per month, and the excess funds have been building up in his account for about one year. (a) What other types of accounts are available to Kwaku? (b) How might he manage his accounts to earn as much interest as possible and keep his money safe? (c) How might he use electronic money management to accomplish these tasks?
are the three ways for Maria to better manage her cash balance?Maria Luna, a 25-year-old nurse, works at a hospital that pays her every 2 weeks by direct deposit into her checking account which pays no interest and hasno minimum balance requirement. She takes home about PHP9,000 every 2 weeks or about PHP18,000 per month.She maintains a checking account in the bank that does not earn any interest income with a balance of around PHP7,500. Whenever it exceeds that amount she transfers the excess into her savings account, which currently pays 1.5% annual interest.She currently has a savings account balance of PHP85,000 and estimates that she transfers about PHP3,000 per month from her checking account into her savings account.Maria pays her bills immediately when she receives them. Her monthly bills average about PHP9,500, and her monthly cash outlays for food and transportation cost total about PHP4,500.An analysis of Maria’s bill payments indicates that on average she pays her bills 10…
While she was travelling, Kadijah took advantage of the convenience of cash withdrawals on her credit card since her Canadian debit card wasn't accepted in the country she was in. According to her travel budget she withdrew $150 every day for food, activities and shopping for 21 days. When she got home, on the 21st day, she checked her credit card bill on-line and it showed that she had been charged interest already even though her payment wasn't past due. It turns out that interest is compounded daily on cash withdrawals, from the day the cash is withdrawn. If the interest rate on cash withdrawals is 28%, what was her total bill when she got home? What would be the total interest paid?
An individual spends $100 per day. Suppose that this person pays for all her purchases using her credit card. She withdraws no money from her bank account until the morning of the fourth day, when she withdraws the whole amount necessary to pay for her credit card purchases over the previous four days. Calculate the amount of money this person withdraws each time she goes to the bank. She will withdraw $ 400. (Enter your response as a whole number.) Compute this person's money holdings at the beginning of each of the next four days. For day 1, money holdings are $ For day 2, money holdings are $ (Enter your response as a whole number.) (Enter your response as a whole number.) For day 3, money holdings are $ (Enter your response as a whole number.) (Money holdings are at the beginning of the day before she makes any For day 4, money holdings are $ payments.)
Christopher just received his checking account statement from his bank. He has a NOW account with free checking that pays 0.75% APR on the balance and requires a $500 minimum balance. His statement shows that he currently has a balance of $3,950. In looking at his statement he notices that his car payment check for $400 is still outstanding, and that his recently received payroll deposit of $3,600 had not posted at the time the statement was created. His normal living expenses average $1,500 per month including his car payment. Other than his car loan, he rarely writes any checks as he prefers to use his debit card and ATM card for day-to-day living expenses. He pays his credit card balance in full every month. Other than his checking account he does not own any investments. He has always dreamed of owning a house, and would like to buy one within the next five years. He has access to a 401(k) pension plan at work where his employer will match contributions up to 6% of his salary. He…
Christopher just received his checking account statement from his bank. He has a NOW account with free checking that pays 0.75% APR on the balance and requires a $500 minimum balance. His statement shows that he currently has a balance of $3,950. In looking at his statement he notices that his car payment check for $400 is still outstanding, and that his recently received payroll deposit of $3,600 had not posted at the time the statement was created. His normal living expenses average $1,500 per month including his car payment. Other than his car loan, he rarely writes any checks as he prefers to use his debit card and ATM card for day-to-day living expenses. He pays his credit card balance in full every month. Other than his checking account he does not own any investments. He has always dreamed of owning a house, and would like to buy one within the next five years. He has access to a 401(k) pension plan at work where his employer will match contributions up to 6% of his salary. He…
While she was travelling, Zainab took advantage of the convenience of cash withdrawals on her credit card since her Canadian debit card wasn’t accepted in the country she was in. According to her travel budget she withdrew $125 every day for food, activities and shopping for 21 days. When she got home, on the 21st day, she checked her credit card bill on-line and it showed that she had been charged interest already even though her payment wasn’t past due. It turns out that interest is compounded daily on cash withdrawals, from the day the cash is withdrawn. If the interest rate on cash withdrawals is 28%, what was her total bill when she got home? What would be the total interest paid?
Sidney took a $300 cash advance by using checks linked to her credit card account. The bank charges a 2 percent cash advance fee on the amount borrowed and offers no grace period on cash advances. Sidney paid the balance in full when the bill arrived. a)What was the cash advance fee? b)What was the interest for one month at an APR of 20 percent? c)What was the total amount she paid? d)What if she had made the purchase with her credit card and paid off her bill in full promptly? Assume the credit card has a grace period.
Everlyne has a personal LOC with her bank with a maximum credit limit of $11,000.00. The interest rate is prime plus 1.25%, and the current prime rate is 3.5%. Regardless of any account transaction activity, her bank requires on the first of every month for her to pay "the greater of 5% of the current balance or $100" from her checking account. She is allowed to exceed her maximum credit limit, but if she does the entire balance is subject to 22% interest until such time as the balance is restored below the credit limit. On October 1, the opening balance on her LOC was $2,300.00 She took advances of $4,900.00, $4,400.00, and $3,700.00 on October 17, November 16, and December 1, respectively. She made payments of $4,200.00, $4,900.00, and $3,900.00 on November 1, November 21, and December 18, respectively. The prime rate decreased by 0.5% on November 9. Complete the repayment schedule below by filling in the interest charges for October, November, and December Date Balance before…
Mary's credit card situation is out of control because she cannot afford to make her monthly payments. She has three credit cards with the following loan balances and APRS: Card 1, $4,700, 20%; Card 2, $5,800, 24%; and Card 3, $3,100, 17%. Interest compounds monthly on all loan balances. A credit card loan consolidation company has captured Mary's attention by stating they can save Mary 18% per month on her credit card payments. This company charges 15.5% APR. Is the company's claim correct? Assume a 10-year repayment period. Mary's current minimum monthly payments are $ Mary's minimum monthly payments after loan consolidation will be $[ Is the company's claim correct? Choose the correct answer below. (Round to the nearest cent.) (Round to the nearest cent.) O A. No because Mary's monthly credit card payments will decrease for less than 18%. OB. Yes because Mary's monthly credit card payments will decrease for more than 18%. OC. No because Mary's monthly credit card payments will…

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