FINANCE AND
A R I T H M ET I C
M TH-1 1 0 1 -3
Sco red Act iv it y 2
Mark: Date corrected: Corrector’s signature: Student’s Identification
Name: Address: Email: Telephone No.: Date sent: MT H -1 1 0 1 -3 – FIN AN CE AN D ARITH METIC
This scored activity was produced by the Société de formation à distance des commissions scolaires du
Québec.
Project Coordinator:
Ronald Côté (SOFAD)
Author:
André Dumas
Illustration:
Marc Tellier
Content Revision:
Gilles Gacon
Alain Bombardier
Pedagogical Revision
Louise Lachapelle
Translation:
Claudia de Fulviis
Proofreading:
Claudia de Fulviis
Desktop Publishing:
Serge Mercier
Graphical Layout:
Alain Lemay
Despite the following statement, SOFAD authorizes adult education centres using the related learning guide
to reproduce this scored activity.
© (SOFAD)
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electronic means, including micro-reproduction, is forbidden without the written permission of a duly authorized representative of the Société de formation à distance des commissions scolaires du Québec (SOFAD).
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© SO FA D
SC ORE D ACT IVI T Y 2
Scored Activity 2 deals with learning situations 3 and 4 of the guide entitled Finance and Arithmetic. Once
you have completed this activity, send it to your tutor together with any related documents.
Most education centres require that you obtain
an average of 60% or more in order to write the official examination.
Instructions
• Fill in the “Student’s Identification” section.
• Carefully read each question before answering it.
• Write your answers in the appropriate spaces and give complete solutions, as applicable.
• The weighting for each question is indicated to the left of each number, in parentheses.
• You may use a calculator. Note: As much as possible, show your calculations in detail.
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MT H -1 1 0 1 -3 – FIN AN CE AN D ARITH METIC
Scored Activity 2
Points
1. Do the following operations:
(2)
a) 12(10 ÷ 2) + (–11) – 5(8 + 2) + 1 =
1
b) 3.85 + ( 5 ÷ 6.25 – 4 5 ) × (5.35 – 7.35) =
(2)
8
(2)
c) (17 – 15) × 3 + (–6 ÷ (–3) × 8 ÷ (–4)) + 2 × (–5) =
1
(2)
1
d) 3 5 + 5.45 ÷ (–2.5) – 0.90 ÷ (12 2 + 5.50) =
(2)
e) ((33.55 – 2.05) ×
6
1
) + × (–1.8 ÷ 0.3) =
7
2
4
© SO FA D
SC ORE D ACT IVI T Y 2
2. Using Michel’s pay slip below and assuming that the weekly source deductions were the same
on each pay slip throughout the year…
E
M
P
LO
Y
In ER
c.
Employee
Michel Dupont
Number of hours
40
Hourly rate
$18.75
Gross salary
$750.00
Net salary
$455.12
Taxable salary
$659.60
100 Main St.
Montreal, Quebec
J9Q 1A0
Pay period
Week of 2010-11-01
DEDUCTIONS
(5)
QPP
$33.79
Union dues
$3.00
QPIP
$4.03
RPP
$24.38
EI
$10.20
Provincial tax
$105.54
RRSP
$15.00
Federal tax
$98.94
a) First write the sequence of operations for calculating the net annual (52 weeks) salary,
and then calculate it.
(3)
b) Which source deductions are considered federal non-refundable tax credits?
(3)
c) Which source deductions are considered federal deductions?
(3)
d) Under federal non-refundable tax credits, Michel is entitled, in 2011, to a personal basic
amount of $10,527.00 and another amount of $1,065.00 for employment. He has two dependants aged 15 and 19. A tax credit of $2,131.00 per child is granted for any child under
18 years of age. Calculate the total federal non-refundable tax credits to which Michel is
entitled. First write the sequence of operations.
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MT H -1 1 0 1 -3 – FIN AN CE AN D ARITH METIC
(3)
e) Calculate the amount of federal non-refundable tax credits he can claim. First write the
sequence of operations.
(3)
f) Calculate the net federal tax payable, given that Michel’s tax rate is 15% and that his net
income is the same as his taxable income. First write the sequence of operations.
3. For the past several years, Francis, a Frenchman residing in Quebec, has owned a private company that imports French wines.
All private importers have their goods stored in an SAQ warehouse in Montreal in order to
have them tested and clear customs through the application of various provincial and federral
taxes. On the bill below, the exporter’s product price is in euros (€) and the SAQ’s sale price is
in Canadian dollars ($), payable by the importer.
Exchange rate $1.3700 = 1 euro (€); 1 euro (€) = $0.7299
Note: The exchange rate is always four decimals.
VAT (value added tax, equivalent
19.6%
to the GST and QST)
Excise tax (federal) $0.62 per litre of wine (2006)
Specific tax (Quebec) $0.89 per litre of wine (2012)
GST 5%
QST 9.5%
Transportation
1 crate
9.1650 €/crate
1 bottle
750 millilitres
12 bottle
Use the information in the above table to answer the following questions.
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SC ORE D ACT IVI T Y 2
(8)
a) Complete the chart below and determine the total amount Francis will have to pay.
#
Product name
Number of
1
Château Loustic 2008
5
327.600 €
2
Château D’eau 2010
7
299.424 €
3
Beaujolais Visage 2011
8
223.872 €
4
Château Rigolo 2009
6
347.496 €
5
Château Peubanal 2009
2
624.960 €
crates
Price/crate
6
Subtotal
7
VAT (19.6%)
8
Transportation
9
Subtotal
10
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Use the space provided on the next page for your calculations.
Total
Conversion to Canadian
dollars
11
Excise tax
12
Specific tax
13
Subtotal
14
GST
15
QST
16
Total sale
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MT H -1 1 0 1 -3 – FIN AN CE AN D ARITH METIC
Price of wine
Calculation of VAT
Calculation of transportation
Conversion to Canadian $
8
Excise tax
Calculation of GST
Specific tax
Calculation of QST
© SO FA D
SC ORE D ACT IVI T Y 2
(4)
b) What percentage of the sale price does the total tax represent (in Canadian dollars)? First
write the sequence of operations. Round the result to the nearest hundredth.
(3)
c) At what price must Francis sell his wine in order to earn a profit of 25%? First write the
sequence of operations.
(5)
4. Jean runs a business. Last year, her balance sheet showed a deficit of $10,347.76. This year,
her balance sheet showed a profit of $3,108.94. Calculate the difference between last year’s
balance sheet and the current balance sheet and state what this means. Write the sequence of
operations, then solve the problem.
(5)
5. Luke lends a friend $650.00 provided she will repay the money no later than six months hence.
Luke is charging his friend $15.50 per month in interest for the duration of the loan. At what
annual rate did Luke lend his friend the money? First write the sequence of operations.
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MT H -1 1 0 1 -3 – FIN AN CE AN D ARITH METIC
(15)
6. Before lending Roy $20,000.00 for home renovations, his financial institution has asked him
to draw up his financial statement. After doing his research, he indicated the following information in his statement. Note that Roy rounded the numbers for simplicity’s sake, on the
recommendation of his financial advisor.
Roy drew up a list of assets and liabilities in a table.
Items
Savings account $2,600.00
Mortgage $125,000.00 ($800.00 per month)
Chequing account $1,200.00
Guaranteed Investment Certificate
$2,000.00
(GIC)
Credit card $300.00 ($5000.00 limit)
RRSP $10,000.00
Home value $200,000.00
Property tax $900.00 (deadline: 3 weeks; 4 times a year)
Electricity $150.00 per month
Telephone $80.00 per month
Car insurance $70.00 per month
Car lease $350.00 per month
Car loan $8,000.00
Residual value of car $16,000.00
Cable $50.00 per month
Home insurance $25.00 per month
Furniture $15,000.00
One year term life insurance for
$40.00 per month
$50,000.00 10
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SC ORE D ACT IVI T Y 2
In the form below, Roy drew up his financial statement based on the previous list. However, in
filling it in, he made 5 mistakes. Find these 5 mistakes.
PERSONAL FINANCIAL STATEMENT
Assets
Short term
Cash – Chequing account
$1,200.00
Cash – Savings account
Total assets – Short term
Long term
Certificates of deposit
Securities – shares/bonds
RRSP
Gross:
Life insurance (surrender value)
Total assets – Long term
Personal property
Real property (market value)
Vehicles
Furniture
Other assets (specify)
$2,600.00
$3,800.00
$3,800.00
$2,000.00
Net:
$10,000.00
$50,000.00
$62,000.00
$62,000.00
$200,000.00
$16,000.00
$15,000.00
Total real property
$231,000.00 $231,000.00
TOTAL ASSETS
Debts
(liabilities)
Short term
Credit cards (current)
Credit cards
Loans (car/furniture)
Mortgage (rent)
Other debts (specify)
Total debts – Short term
Long term
Credit cards
$296,800.00
Limit:
Loans (car/furniture)
Mortgage
$5,000.00
Payment:
Payment:
Payment:
Payment:
$300.00
$350.00
$800.00
$1275.00
$2,725.00
$2,725.00
$8,000.00
$125,000.00
Other debts (specify)
Total debts – Long term
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$133,000.00 $133,000.00
TOTAL DEBTS (LIABILITIES)
$135,725.00
NET WORTH (ASSETS – LIABILITIES)
$161,075.00
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MT H -1 1 0 1 -3 – FIN AN CE AN D ARITH METIC
(10)
7. Claude is self-employed and uses his car to earn income. He is entitled to a depreciation (loss
of value) deduction in his annual income tax return. According to the 2011 rules, the two governments consider that cars depreciate by 15% the year they are purchased and by 30% on the
residual value in subsequent years. Calculate the actual value of Claude’s car after three years
of use, given that he paid $27,950.00 for it. Write the sequence of operations for calculating the
market value of the car after three years, and then calculate it.
(10)
8. Chloe borrowed $10,000.00 at an annual rate of 9.2%, from December 17, 2010 to March 24,
2011. She will pay back the principal at maturity. Her financial institution requires that she
pay monthly interest. Calculate the monthly interest, according to the daily rate, as well as the
total interest paid. Write the sequence of operations for calculating the monthly interest.
(10)
9. A truck loaded with construction materials weighs 6490 kg. Timber and asphalt shingles account for 54.6% and 34.9% of the load respectively, and the rest is made up of plywood boards.
The load represents 40% of the truck’s weight.
Write the sequence of operations for calculating the weight of each material. Determine each
material’s weight in kilograms to the nearest hundredth.
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Review of Operational Competencies
What is an operational competency? An operational competency is not related to any specific subject, but
can be used in all subjects. For example, the competency Adopts effective work methods is acquired to
different degrees in all subjects, and not in any subject in particular. However, it is closely related to the subject-specific competencies (mathematics, science, English, history, etc.) since it is used to develop them to
varying extents even though you may not be aware of this. There are several operational competencies. The
following two are developed in this course: To communicate and to reason logically.
To communicate
In light of the learning situations you have just completed, indicate your ability to interpret and convey the
following information.
Subject of
communication
Information
Yes
In part
No
Symbolic
- Usefulness of parentheses and brackets
q
q
q
language
- The rule of signs (+, -, and ÷) in arithmetic operations
q
q
q
- Meaning of GST, QST and VAT
q
q
q
- Distinguishing between gross annual salary and net annual salary
q
q
q
- Meaning of source deduction
q
q
q
- Meaning of non-refundable tax credit
q
q
q
- Meaning of net federal tax
q
q
q
- Meaning of net income
q
q
q
- Meaning of taxable income
q
q
q
- Meaning of rate
q
q
q
- Meaning of tax rate
q
q
q
- Distinguishing between balance owing and refund
q
q
q
- Meaning of exchange rate
q
q
q
- Meaning of excise tax
q
q
q
- Meaning of specific tax
q
q
q
- Meaning of percentage
q
q
q
- Meaning of absolute value
q
q
q
- Meaning of loan
q
q
q
- Meaning of annual rate
q
q
q
- Meaning of monthly rate
q
q
q
- Distinguishing between a term loan and a non-term loan
q
q
q
Vocabulary
© S O FAD
- Meaning of €
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MT H -1 1 0 1 -3 – FIN AN CE AN D ARITH METIC
Calculations
- Applying the rule of signs (+, -, and ÷) in arithmetic operations
q
q
q
q
q
q
- Calculating non-refundable tax credits
q
q
q
- Calculating medical expenses for non-refundable tax credits
q
q
q
- Calculating net income
q
q
q
- Calculating taxable income
q
q
q
- Calculating tax payable
q
q
q
- Calculating the balance owing or refund
q
q
q
- Converting from euros to Canadian dollars and vice versa
q
q
q
q
q
q
- Rounding a number
q
q
q
- Percentage of a number and a fraction
q
q
q
- Finding a change in absolute value
q
q
q
- Calculating annual interest
q
q
q
- Calculating monthly interest
q
q
q
- Calculating a loan repayment
q
q
q
- Solving sequences of operations
q
q
q
- Drawing up a financial statement
q
q
q
- Filing an income tax return
q
q
q
- Applying the rule of the priority of multiplication and division
over addition and subtraction
- Converting from Canadian dollars to American dollars and vice
versa
Production
To reason logically
In light of the learning situations you have just completed, indicate your ability to perform the following
operations.
Operations
Yes
In part
No
- Using negative numbers in real-life situations
q
q
q
- Using percentages in real-life situations
q
q
q
- Placing amounts of money in the correct categories (income and expenses)
q
q
q
- Checking the plausibility of calculations
q
q
q
- Selecting the appropriate information before doing a calculation
q
q
q
- Determining the magnitude of a fraction in relation to other fractions
q
q
q
q
q
q
- Estimating the magntitude of a result by rounding it before calculating its exact value
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SC ORE D ACT IVI T Y 2
Student’s questions
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Tutor’s comments
1927-07
May 2013