Question

You are debating about whether to buy a new computer for $800.00 or a refurbished computer with the same equipment for $640.00. If you are paid $10.00/hour and your deductions are FICA (7.65%), federal tax withholding (12%), and state tax withholding (8%), how many hours do you have to work to pay for the refurbished computer?
111 hours


98 hours


89 hours


87 hours

Answer 1

First calculate all the deduction

FICA = $10 per hour x 0.0765 = $0.77 per hr

Fed tax = $10 per hr x 0.12 = $1.2 per hr

State tax = $10 per hr x 0.08 = $0.8 per hr

Remaining pay = 10 – 0.77 – 1.2 – 0.8 = $7.23 per hour

Time required = $640 / $7.23 per hr

Time required = 89 hrs