Question

g You earn $40,221 at your job and must pay 11% of your income in taxes. You then decide to save 8% of your disposable income. How much do you have left for consumption spending? Round to two decimal places.

Answer 1

Answer:

The amount left for consumption spending is $32,932.95

Explanation:

The amount left for consumption spending is known as disposable income or take-home pay less savings .The disposable income is the income left after taxes have been paid to relevant tax authority.The computation of amount left for consumption is done below:

Gross income                                           $40,221

Tax at 11%(11%*$40,221)                            ($4424.31 )

Disposable income                                   $35,796.69

Savings at 8% of disposable income

($35,796.69*8%)                                          ($2,863.74)

Amount left for consumption spending     $32,932.95

This is not mean that I have to spend this $32,932.95 during the month, there might some investments  I want to my money on to yield more returns.

Answer 2

Answer:

The amount of money left for consumption is $32,933.24

Explanation:

Total gross Income

$40221 * (1-tc)

40221*(1-.011)

=35796.69

Disposable income is the amount left for saving and spending after income taxes have been paid which in this case would be $35,797

so 8% of this amount is saved meaning 92% will be left for spending

Savings 37,797*0.08 = $2,863.76

Left for consumption =$32,933.24