Answer:
$3066
Step-by-step explanation:
We have been given that employees in 2012 paid 4.2% of their gross wages toward social security (FICA tax), while employers paid another 6.2%. We are asked to find the amount paid by an employee earning $73,000 per year toward social security.
To find the amount paid by an employee with annual gross earnings of $73,000, we need to find 4.2% of $73,000.
Therefore, the employee will pay $3066 toward social security out of their gross wages.
Compound interest is the adding of interest to the principle sum of a loan or deposit. The amount of money in the account after 2 years is $7426.30, while the interest earned in 2 years is $426.30.
<h3>What is compound interest?</h3>Interest on interest, or compound interest, is the adding of interest to the principle sum of a loan or deposit. It's the outcome of reinvesting interest rather than paying it out, so that interest is received on the principal plus previously collected interest in the next quarter.,
where A is the final amount
P is the principal amount
r is the rate of interest
n is the number of times interest is charged in a year
t is the number of years
Given the principal amount is $7,000 while the rate of interest is 3% which is compounded annually.
A. The amount of money in the account after 2 years will be,
A = $7000(1 + 0.03)² = $7426.30
B. The amount of interest earned is will be,
The amount of interest earned = $7426.30 - $7000 = $426.30
Hence, the amount of money in the account after 2 years is $7426.30, while the interest earned in 2 years is $426.30.
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