Libby Is an Hourly Employee Who Earns $14 What Is the Difference Between Her Pay Using the Quarter-Hour

question 18

Multiple Choice

Libby is an hourly employee who earns $14.32/hour.She is paid overtime only for hours worked past 40 in one week.During a weekly pay period,she worked the following hours: $$\begin{array} { | l | c | c | } \hline \text { Day } & \text { hours } & \text { minutes } \\\hline \text { Monday } & 8 & 47 \\\hline \text { Tuesday } & 8 & 22 \\\hline \text { Wednes day } & 6 & 25 \\\hline \text { Thursday } & 9 & 6 \\\hline \text { Friday } & 7 & 58 \\\hline\end{array}$$ What is the difference between her pay using the quarter-hour and the hundredth-hour methods? Which method pays Libby the greater amount? (Do not round interim calculations.Round final answer to two decimal places.)

• A) $1.07; Quarter-hour
• B) $1.07; Hundredth-hour
• C) $2.86; Quarter-hour
• D) $2.86; Hundredth-hour

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Definitions:

Nominal Interest Rate

indicates the percentage increase in money that the borrower pays the lender, not taking into account the eroding effects of inflation on the real value of the money.

Inflation Rate

The percentage rate at which the general level of prices for goods and services is rising, eroding purchasing power over time.

Real Interest Rate

The rate of interest an investor expects to receive after allowing for inflation, reflecting the true cost of borrowing and the true yield on investments.

Equilibrium Interest Rate

The interest rate at which the demand for funds (borrowing) equates with the supply of funds (savings) in the financial market.