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faust18 [17]
3 years ago
8

9. Suppose Betty saves $200 each month in her 401(k) account. How much less will her monthly take-home pay be than if she saved

nothing? (Assume a combined 20% state and federal income tax rate.)
Business
1 answer:
Elenna [48]3 years ago
4 0

Answer:

$160

Explanation:

The way 401(k) savings work is that employees can save from their earnings before tax is deducted, which means that on the $200 saved no tax is deducted, hence, the take of the employee reduces by $200

When there are savings, a tax of 20% would have been deducted from the $200, as a result, the employee would be left with $160($200-($200*20%)), which means that take-home would reduce by $40, the amount tax deducted.

The reduction in take-home=$200-$40

The reduction in take-home=$160

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