Question

You are paid $14.50/hr. Your deductions are FICA 7.65, federal tax 10.4% state tax 6.5%. You work 17 hr/wk and save 11% each week
how much do you save per month?

Answer 1

To determine how much you save per month, follow these steps:

1. **Calculate your weekly earnings:**
\[
\text{Weekly Earnings} = \text{Hourly Rate} \times \text{Hours Worked per Week}
= 14.50 \times 17 = 246.50
\]

2. **Calculate deductions:**
- **FICA**: 7.65% of weekly earnings:
\[
\text{FICA} = 0.0765 \times 246.50 \approx 18.86
\]
- **Federal Tax**: 10.4% of weekly earnings:
\[
\text{Federal Tax} = 0.104 \times 246.50 \approx 25.65
\]
- **State Tax**: 6.5% of weekly earnings:
\[
\text{State Tax} = 0.065 \times 246.50 \approx 16.04
\]

3. **Calculate total deductions:**
\[
\text{Total Deductions} = \text{FICA} + \text{Federal Tax} + \text{State Tax}
= 18.86 + 25.65 + 16.04 \approx 60.55
\]

4. **Calculate net earnings:**
\[
\text{Net Earnings} = \text{Weekly Earnings} - \text{Total Deductions}
= 246.50 - 60.55 \approx 185.95
\]

5. **Calculate savings:**
- Savings rate is 11% of net earnings:
\[
\text{Weekly Savings} = 0.11 \times 185.95 \approx 20.45
\]

6. **Calculate monthly savings:**
- Assume there are about 4.33 weeks in a month on average:
\[
\text{Monthly Savings} = \text{Weekly Savings} \times 4.33
\approx 20.45 \times 4.33 \approx 88.67
\]

Therefore, you save approximately **$88.67 per month**.