Algebra with Finance Final Bell Ringer 3

Front

What is the formula to calculate annual federal taxes based on gross biweekly pay?

Back

Annual Federal Taxes = Gross Biweekly Pay × 26 × Tax Rate

Front

How do you calculate Social Security taxes from an annual salary?

Back

Social Security Taxes = Annual Salary × 6.2%.

Front

What is the formula to calculate future rent after a percentage increase over several years?

Back

Future Rent = Current Rent × (1 + Rate of Increase) ^ Number of Years

Front

What is the formula to calculate monthly mortgage payments on a loan?

Back

Monthly Payment = Loan Amount × (Monthly Interest Rate × (1 + Monthly Interest Rate) ^ Number of Payments) / ((1 + Monthly Interest Rate) ^ Number of Payments - 1)

Front

What is a back-end ratio in personal finance?

Back

Back-end Ratio = Total Monthly Debt Payments / Monthly Gross Income.

Front

What is the significance of a 36% benchmark in loan applications?

Back

A 36% benchmark indicates that total monthly debt payments should not exceed 36% of gross monthly income for loan approval.

Front

How do you calculate the total amount of taxes paid based on a percentage tax rate?

Back

Total Taxes Paid = Gross Income × Tax Rate.

Front

What is the impact of a 5.5% annual rent increase on long-term rental costs?

Back

A 5.5% annual increase compounds, leading to significantly higher rent over time.

Front

What is the difference between gross income and net income?

Back

Gross Income is total earnings before taxes and deductions; Net Income is what remains after all deductions.

Front

How do you determine if a loan is affordable based on income?

Back

Compare the back-end ratio to the lender's acceptable threshold (e.g., 36%).