Question

You are planning a trip to Japan in the fall. You estimate that for two weeks, you will need $5,263 (This includes airfare, room and board, daily expenses, and travel). Your gross biweekly income is $1,626 for one pay period. For each pay period, you pay 6.2% Social Security, 1.45% Medicare, $85 in state taxes, $225 in federal taxes, and $775 in regular expenses. You save for 14 consecutive, biweekly pay periods. How much will you have saved up and will you have saved enough to visit Japan for two weeks? Round all your answers to the nearest dollar. a. $2,014; no c. $5833; yes b. $5,861; yes d. $8,092; yes

Answer 1

The income that you can save from each biweekly paycheck is
.. $1626 -6.2%*1626 -1.45%*1626 -85 -225 -775 = $416.61

After 14 pay periods, you will have saved
.. 14*$416.61 = $5832.54

This is more than your estimated trip requirement.

c. $5833; yes