Question

You are paid $15.60/hr. Your deductions are FICA (7.65%), federal tax withholding (11.15%), and state tax withholding (6.5%). You work 15 hr/wk and save 10% each week. How much do you save each month?
a) $76.61


b) $79.29


c) $69.92


d) $71.04

Answer 1

Option C is the answer.

Explanation:

Amount paid per hour = $ 15.60

Total working hours in a week = 15

Hence, total earnings in a week are = 15.60 x 15 = $234

Deductions are =

7.65 % of 234 = $\frac{7.65}{100}*234= 17.90$

11.15 % of 234 =  $26.09

6.5% of 234 =  $15.21

So totaling all deductions we get $59.20

Hence, earnings per week after deductions become = 234-59.20 = $174.80

As each week, 10% is saved, so amount saved each week is = 174.80 x 0.10 = $ 17.48

So, savings per month (4 weeks in a month) becomes = 17.48 x 4 = $69.92

Hence, option c) $69.92 is the answer.