Lesson Summary : Example17b (Jemima)

Problem:

Example 17b:

Mr Fong was 64 years old in 2012. He earned $250,000 in 2012. His chargeable income for the Year of Assessment (YA) 2013 is computed as follows:

	$	$
Total Employment Income		250,000
Less: Donations		250
Assessable Income*		249,750
Less: Reliefs
Earned Income Relief	8,000
Employee CPF contribution relief	6,375	14,375
Chargeable Income*		235,375

What is Mr Fong's tax payable on his chargeable income of $235,375?

(ans: http://www.iras.gov.sg/irasHome/page04.aspx?id=8278)

Solution:
First $200,000                     20,750.00

Next $35375 at 18%              6367.50

                                      _____________
Gross tax payable                 27117.50

Less: YA 2013                        1500.00
Personal tax rebate
(Max of $1500)
                                       _____________
                                             25,617.50

Mr Fong's tax payable is $25,617.50.

Revision: Probability

SEAB SYLLABUS 2014

0. 3.3 Probability
   Include:
   
• probability as a measure of chance
  
• probability of single events (including listing all the possible
  outcomes in a simple chance situation to calculate the
  probability)
  
• probability of simple combined events (including using
  possibility diagrams and tree diagrams, where appropriate)
  
• addition and multiplication of probabilities
  
• mutually exclusive events and independent events
  Exclude use of P(A ∪ B) = P(A) + P(B) – P(A ∩ B). 
  

01 Finance Matters: Example 16 Solution

A salesman buys a second-hand car for $40000 and hires it out for a period of 24 weeks at a charge of $520 per week . Insurance costs him $1800 and repairs during the   period cost $450. He then sells the car for $38500.

He buys another car for $40000 and plans to hire it out at a lower weekly rate, but, in addition, he imposes a mileage charge of 15¢ per km travelled.

He estimates that the car will on average travel 600 km per week and that at the end of the 24 weeks, he will again be able to sell the car for $38500.

(a)  Calculate the profit made on his first transaction.                                                           [3]

       Given that for the second car the charges for insurance and repairs remain the same

       and his profit is to be 15% of his initial outlay of $40000, calculate

(b)  the amount of money he must make from the rental of car,                                            [3]

(c)  the weekly rate he must charge to make this profit.                                                        [2]

SOLUTION

(a) 24 x 520 - 1800 - 450 = 10230
10230 +38500 -  40000 = $8730

(b) 0.15 x 40000 + 450 +1800 +40000 - 38500 = $9750

(c) (9750 - 0.15 x 600 x 24)/24 = $316.25

7/1/14 lesson summary

What is interest?
Money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt.

Terms to familiar yourself with:

Principle [P] - The initial sum of money to calculate the interest on, also commonly known as the amount borrowed.

Interest Rate [r] - The percentage of the principle that will be paid as an interest in a certain time period.

Time [t] - Regular-spaced time intervals to collect interest.

Simple Interest Formula: Interest [I] = P x r x t

Compound Interest includes interest on interest already paid or changed.

Compound Interest Formula: I = P(1+(r/100)^t - P

how the formula is derived:

01 EXCHANGE RATE

What is CURRENCY EXCHANGE?

Maybe you've traveled to Mexico or Canada, and exchanged your American dollars for pesos or Canadian dollars. Or, perhaps you've traveled from England to Japan and exchanged your English pounds for yen. If so, you have experienced exchange rates in action. But, do you understand how they work?

You've probably heard the financial reporter on the nightly news say something like, "The dollar fell against the yen today." But, do you know what that means?

In this article, we'll tell you what exchange rates are and explain some of the factors that can affect the value of currency in countries around the world.



source: http://money.howstuffworks.com/exchange-rate.htm

01 HIRE PURCHASE

What is hire purchases?

Hire purchase is a method of buying goods in which payment of purchase price is spread over a specific period of payment of an initial deposit followed by regular installments. 

The deposit is called down payment.

Items that can be bought through hire purchases:

1. Mobile devices
2. Motor vehicles
3. Computers
4. Industrial machinery
5. Equipment
6. Furniture

Advantages of buying through hire purchase:

1. You do not need large amounts of cash to buy an asset
2. The seller is more willing to allow you to make small regular payments as the assets stay in his/her ownership until you have made all the repayments
3. As the repayment amounts are fixed, it is easier to budget or manage your cash flow
4. Higher purchase loans are handy for businesses who are buying assets that do not qualify for fixed assets loans

Disadvantages of buying through hire purchase:

1. You end up paying more for the asset than you would if you paid outright. On top of that, you would have to service the interest on the loan
2. The seller can take back the asset if you fail to make a scheduled repayment. This is true even if you have already paid a substantial amount for the asset

source: http://www.infinitifinancialservicesuk.com

01 APPLICATION OF MATHEMATICS IN THE REAL WORLD: SCENARIO 2

KNOWLEDGE & SKILLS

Enable students to

·      develop the necessary process skills for the acquisition and application of mathematical concepts and skills;

·      develop the mathematical thinking and problem solving skills and apply these skills to formulate and solve problems;

·      recognise and use connections among mathematical ideas, and between mathematics and other disciplines;

Scenario 2

SP Services supplies electricity to households and businesses in Singapore. It also provides billing and payment collection on behalf of various utility service providers such as the Public Utilities Board for water charges, City Gas for gas charges and the respective refuse companies for refuse removal fees. The bill charges are for the period reflected here (ie 21 May 2013 to 19 Jun 2013, as shown in the sample bill). 

Source: http://www.singaporepower.com.sg/irj/servlet/prt/portal/prtroot/docs/guid/b051fb9b-cb6c-2e10-c498-b8af349b0176?spstab=Our%20Services




1. What information does each component of the bill give?
2. Provide information on what should be the (i) constants and (ii) variables.
3. If the person wants to reduce his Total Current Charges what considerations should be taken?
4. POST your responses as comments.