Question

Chin needs more money in his net pay each month, so he plans to reduce his federal income tax deduction from 12% to 11%. His monthly gross pay is $3,500, and his deductions before the change are listed in the table.
Deduction
Dollar Amount
Federal Income Tax
$420
State Income Tax
$95
Social Security
$89
Medicare
$40

What will be his new monthly net pay? Round your answer to the nearest dollar.
$2821
$2857
$2860
$2891

Answer 1

Answer:

$2860

Explanation:

Given that,

Monthly gross pay of Chin is $3,500

Total taxes are as follows :

Federal Income Tax  = $420

(He plans to reduce his federal income tax deduction from 12% to 11%.)

$=420\cdot\frac{12}{100}-420\cdot\frac{11}{100}\\\\=\ 415.8$

State Income Tax  = $95

Social Security  = $89

Medicare  = $40

New monthly net pay = Monhly gross-sum of texes

= $3,500-($415.8+$95+$89+$40)

= $2860.2

or

=$2860

Hence, his new monthly net pay is $2860.