Key NUMBERS and CALCULATIONS

Question 1

Money Purchase limit (2019) =?

Salary required to contribute max?

Answer 1

1. $ 27,230
2. $151,278

Question 2

Effective Rate

,

Answer 2

(Nominal rate /2) X itself Added to nominal rate 8/2 =4 4x4=16 Effective rate- 8.16%

Question 3

CF CALCULATIONS CLEARING: - CF - 2ND - [CE/C-CLR WORK] Calculations: IRR - internal rate of return NPV - Net present value

Answer 3

?

Question 4

Ch 4 NOMINAL 2 EFFECTIVE Interest rate (BA 2 Plus Pro) calculator steps - Given: 8% semiannual NOT in advance ** Nominal MEANS as stated BEFORE compounding/ inflation)

Answer 4

• 2ND - #2 - ! NOM - 8 - ENTER - !C/Y - 2 - ENTER - !EFF - CPT = Effective Rate answer

Question 5

CMHC interest chart re: homes over 500K

Answer 5

5% > 500K 10% -500 to 1M 20% < 1M 500,000 ✖️ 5% = 25K … next 500k at 10% I.e. 250 ✖️ 10% = 25K So 750K house has min 50K down payment

Question 6

Ch 4 Monthly Mortgage Payment (BA 2 Plus Pro) calculator steps - State- Monthly Mortgage Payment Formula

Answer 6

?

Question 8

GDS vs TDS calculations

Answer 8

PITH or mortgage, principal, interest, taxes, heating, 50% condo fees ➗ Gross income MAX = (annual income/12) ✖️ 32% - TVS includes consumer debt

Question 9

Holding Period Reutrn

Answer 9

AKA- Realized Total Return (expressed as a decimal)

Formula:

Sell price - buy price + interest

DIVIDED BY

Buy price

Question 10

Mortgage Penalties Calculation for: 1- 3 month penalty 2- IRD- interest difference penalty

Answer 10

3 MONTH PENALTY: Owing ✖️ Interest ➗12 months = 1 month ✖️ 3 months - answer - IRD- Interest Rate Differential (Old rate - lesser rate) ✖️ time left

Question 11

PAYMENT / COMPOUNDING CLEARING: - 2ND - [FV-CLR TVM] -2ND - [COT-QUIT]

Answer 11

• 2ND - [P/Y] - 1 - ENTER - ⬇️ - [C/Y] - 1 -ENTER -2ND - [COT-QUIT]

Question 12

Real Return Equation is ?

Answer 12

{( 1 + nominal return) ➗(1 ➕ inflations) } ➖ 1 =

Question 13

RESET. / SET-UP: RESET: - 2ND - [+|-, RESET] - ENTER - 2ND - [CPT-QUIT] SET-UP: - 9 decimal places - AOG - END ( UNLESS specifically told to change) Note: CF - users END- dont let deposit BGN - withdrawal END description confuse you

Answer 13

DECIMAL.🔄 CHN/ AOG: - 2ND - [period- FORMAT] - 9 - ENTER - ⬇️ - AOS - ENTER - 2ND - [QUIT] BGN 🔄 END: - 2ND - [PMT-BGN] = BGN - 2ND - [SET] = END - CE/C = 0.00

Question 14

Semi-annual compounding - change on nominal vs effective interest rate Not in advance - not calculated in advance

Answer 14

Not in advance - reduces total interest costs ? HOW?

Question 15

Total Rate of Return:

• Define
• state formula

Answer 15

Define: total return, income + change in value/price

Formula:

interest + change in value DIVIDED BY starting value

= Total Return

Question 16

TVM CALCULATIONS - N - I/Y - PV - PMT - FV Formulas: - future value - payment amounts/ number of - interest rate - MORTGAGE payments - BOND value

Answer 16

Clear: - CE/C = 0.00 - 2ND - [FV-CLR TVM] - 2ND -[CPT-QUIT] Set-up: - 2ND - [I/Y-P/Y] - 1 - ENTER - ⬇️ - C/Y - 1 - ENTER - 2ND - [CPT-QUIT] End/BGN: - 2ND - END/BGN - 2ND - [ENTER-SET] - 2ND - [CPT-QUIT]

Question 17

RRSP contribution calculation

• including PA / PSPA calculations

Answer 17

1. Earned income from last year - Really Rich…
   
   • Not including investment income
   • minus RSP/pension/union dues/childare etc
2. Multiply by 18% (2019 max $26,500)
3. Minus PA from previous year
   
   • DCPP = you + boss contributions (b’s not tax deductable)
   • DBPP = (9 x Benefit amount) - $600
4. Minus PSPA from current year
5. Plus unused contribution room
6. If approp - Plus 2K allowable over

Question 18

Calculting Tax Return Numbers

1. Basic Exemption (2019) amount =?
2. Calculating Basic and Spousal Tax Credits

Answer 18

1. $12,069
   
   • x 15% = tax credit to limit of $1,810
2. Spousal and Equivalent on your return
   
   • $12,069 x 15% = YOUR tax credit - to limit of $1,810
   • Plus ($12,069 - Net income of spouse/equiv ) x 15% = THEIR portion of tax credit -limit $1,810