Financial Math// Sources of Income (Practice)

Explain why you might not want to have passive income as your only source of income.

Passive income relies on what others do and you don't really have control over the amount of money that you make. The income you get from it can be very good or bad without you doing anything different. For example, if you are an author and people hate your book, you may not have a very good income from it. On the other hand, if they love it, you might make a lot of money.

The table below shows the typical hours worked by employees at a company. A new employee is offered an annual salary of $37,000. Hourly employees get paid $14 per hour, but get $21 per hour for each hour over 40 hours. Should the new employee choose the salaried or hourly pay? Explain your reasoning.

The total number of hours worked in the week is 46. The hourly pay would be 40(14) + 6(21) = $686 per week. The annual earnings are 52(686) = $35,672. The salary pay is more than the hourly pay based on the typical hours worked each week given in the table. Therefore, the employee would probably want to choose the salaried pay.

Allen bought 1,350 shares of stock for $12 per share. If he sold all his shares for $27,000, how much profit on each share did he make?

b. $8

Tyra makes $21.40 per hour at her job for the first 40 hours and $32.10 for anything over 40 hours. If Tyra typically works 45 hours per week, how much does she earn?

c. $1,016.50

Which of the following is an example of earning income from capital gains?

c. selling a car and making a profit of $3,000

Zoe is a chemistry teacher earning a salary of $38,000 per year. She also tutors part-time, charging $20 per session. Which of the following types of income does Zoe have? I earned income II passive income III capital gains income

a. I

Trevor restores antique cars and sells them for profit. This is an example of _____ income.

a. capital gains

Byron's income last year was $61,700. He made $48,000 at his plumbing job and had income from an apartment that he rented out. If Byron earned the same amount of rent each month for the entire year, approximately how much per month did he collect?

b. $1,140

Desiree works 28 hours per week. She has a monthly income of $120 from investments. Desiree also plays in a band one night a week making $200. She has a total annual income of $49,696. Desiree wants to ask her boss for a raise so that next year she can have a total income of $51,880. Assuming the other incomes remain the same, how much of an hourly raise will Desiree need?

b. $1.50

Jennifer earns $17.35 per hour at her job. She works 6 hours per day, 5 days per week. What is Jennifer's gross income for a 2 week pay period?

d. $1,041.00