EXAMPLE 2. Find the income tax of an unmarried who has a net income of $6000. person SOLUTION. $6000-$1000-$5000, the amount subject to normal tax. 4% of $4000+8% of $1000=$160+$80 = $240, the normal tax. 1% of $1000 = $10, the surtax. $240+$10 = $250, the total income tax. Exercise 79 1. Find the income tax on a net income of $3500 of an unmarried man. 2. Find the income tax on a net income of $7500 of an unmarried man. The rate of surtax is 1% on the first $1000 in excess of $5000, and 2% on the remainder. 3. Find the income tax on a net income of $7000 of a married man, no dependent children. The rate of surtax is the same as in the preceding problem. 4. Find the income tax on a net income of $6800 of a married man with three dependent children. The rate of surtax is the same as in problem 2. 5. Find the income tax of a married man with no dependent children, who has a net income of $12,000. The rate of surtax is 1% on the first $1000 in excess of $5000, 2% on the next $2000, 3% on the next $2000, and 4% on the next $2000. 6. By the income tax law of 1918 the incomes of married persons with no dependent children were taxed as follows: Find the rate per cent of tax paid on each of these incomes correct to .01%. 73. Miscellaneous Government revenues. Shortly after the entrance of the United States into the European War internal revenues were placed on many articles that had not been taxed before, and other internal revenues were increased. Examples of these are given in the following exercises. Exercise 80 1. A tax of 1e was levied on each 20¢ or fraction thereof which was paid for express, and 3% on freight charges. In one week a merchant paid $36.20 for freight and the following amounts for express packages: 40¢, 65¢, $1.12, 46¢, $2.35. Find the amount of tax that he paid on all of these. 2. A tax of 8% was levied on passenger fares above 35¢ and 10% on the amount paid for sleeping car berths. In one week a traveling man paid as railroad fare the following amounts $1.45, 68¢, $1, $3.46, 28¢, 98¢, $1.60, $2.38, and $3.54. He paid for sleeping car tickets $1.50 and $2. Find the amount of taxes he paid. 3. A tax of 50¢ was levied on each real estate deed if the value exceeded $100 and was less than $500, with 50¢ additional for each additional $500 or fraction thereof. The tax on promissory notes was 2¢ on each $100 or fraction thereof. A farm of 240 acres was sold for $175 an acre. A payment of $26,000 was made in cash and the remainder by a promissory note. Find the tax on the deed and note. 4. At the end of a year a man attempts to compute as nearly as possible the amount of the war taxes that he has paid during the year. He has an income of $4500. He is married and has two dependent children. Find his income. tax. He has bought an automobile of which the selling price is $1350. He has paid railroad fare to the amount of $126.42. He has bought 1200 cigars which are taxed at $4 a thousand. His express bills were $4, 68¢, and $2.34. Find the war taxes on these items. Find the total tax paid. 74. Insurance. A property owner may protect himself from loss by insurance. For a small per cent of the amount insured an insurance company will agree to pay the owner for his losses if the property is destroyed or damaged by certain agencies. The contract between the insurance company and the person insured is called a policy. The amount to be paid in case of loss is called the face of the policy. The amount paid to the insurance company for the insurance is called the premium. The premium is usually computed at a certain rate on each $100 insured for a given period. The periods most frequently used are 1 year, 3 years, and 5 years. Three common forms of property insurance are fire and lightning, tornado, and marine. By examining the records for a period of years an insurance company can determine with a high degree of accuracy the probable number of fires that will occur in a certain kind of location, as on farms, in villages, and in cities. From these facts the company can compute the premium to be charged to allow for losses and to secure profits. The probability of fire, and therefore the rate of insurance, depends upon the kind of building, as wooden or brick or stone, the fire protection, the nearness to other buildings, and the use of the building. If the number of fires increases, the insurance company will increase the rate of insurance. As losses must be paid from the premiums collected, it is to the advantage of every person insured to improve the protection from fire and to do everything possible to reduce the loss by fire. In life insurance the insured pays an annual premium, in return for which the insurance company promises to pay to the insured or to someone he designates, a certain sum of money, either after a certain number of years or at the death of the insured. Exercise 81 1. A dwelling house valued at $6000 is insured for of its value for 5 years at $1.50 a hundred. Find the premium. 2. Some farm buildings valued at $3500 are insured against fire and lightning for of their value for 5 years at $1.75 a hundred. Find the premium. 3. If the property in the last exercise is insured also against tornadoes the rate is $2.50 a hundred. Find the premium in that case. 4. An automobile which cost $800 was insured for of the cost the first year and for g of the cost the second year at the rate of $1 a hundred. Find the amount of the premiums for the two years. If a fire extinguisher had been carried, the rate would have been reduced 15%. How much would the premium have been reduced by carrying a fire extinguisher? 5. The rate on a city building is 90¢ a year. The rate for 3 years is twice the yearly rate, and for 5 years three times the yearly rate. How much is saved by taking out a policy for 5 years rather than by insuring annually if the building is valued at $6000 and is insured for of its value? 6. The annual rate on a city building is 80¢. When a moving picture theater opens up next door the rate is increased 15%. What is the rate then? Can you give a reason for this increase in the rate? 7. The average annual rate for fire insurance in the United States is about 1% of the amount insured, and in Western Europe the rate is about .1%. The amount of fire insurance in the United States in a recent year, written by the leading companies, was $50,000,000,000. How much would have been saved to policy holders if the rate of insurance had been as low as in Western Europe? 8. The estimated population of the United States in 1914 was 100,399,000. The estimated loss by fire was $182,836,000. What was the loss per capita to the nearest cent? The estimated loss per capita in Western Europe that year was 30¢. The loss per capita in the United States was how many per cent of that of Western Europe? 9. The estimated population of Chicago in a recent year was 2,450,000. The number of fires in that year was 12,447. The total loss of property was $6,018,589. What was the loss per capita? What was the average number of fires for each 1000 people? 10. In a certain city the annual rates on store buildings range from 80¢ on $100 to $1.50. The annual rate on a stock of dry goods is 25% higher, and on a stock of drugs 40% higher, than the rate on the building in which the stock is located. Find the range of the rates on each of these kinds of stocks. 11. In this city a merchant has a stock of dry goods worth $25,000 in a building valued at $8000. The rate on the building is 80¢ and the rate on the stock is 25% higher than on the building. The building is insured for 80% of its value and the stock for 75% of its value. Find the total premium. 12. What is the commission of the agent who wrote this insurance if he got 15% of the premium? 13. A man has decided to build a house on a certain plan. If he builds a frame house with a shingle roof, it will cost him $3600, and the rate of insurance will be $2.40 per $100 for 5 years. If he builds a brick veneered house with slate roof, it will cost him $4500, and the rate of insurance will be $1.80 per $100 for 5 years. If he builds the latter and insures it for of the cost, how much insurance will he save in 20 years? |