You are paid $7.25/hour. You work 40 hours/week for 2 weeks. Your involuntary deductions are FICA (7.65%), federal withholding (14%), and state withholding (7%). How much is your realized income?

Question

(1 point)
Responses

$290.00
$290.00

$206.91
$206.91

$580.00
$580.00

$413.83

Answer 1

To calculate your realized income, we'll follow these steps:

1. Calculate Gross Income:
   \[ \text{Hourly Wage} = $7.25 \]
   \[ \text{Hours per Week} = 40 \]
   \[ \text{Weeks Worked} = 2 \]
   \[ \text{Gross Income} = \text{Hourly Wage} \times \text{Hours per Week} \times \text{Weeks Worked} \]
   \[ \text{Gross Income} = 7.25 \times 40 \times 2 = 580.00 \]

2. Calculate Total Deductions:

   • FICA Deduction (7.65%):
     \[ \text{FICA Deduction} = 580 \times 0.0765 = 44.37 \]

   • Federal Withholding Deduction (14%):
     \[ \text{Federal Withholding} = 580 \times 0.14 = 81.20 \]

   • State Withholding Deduction (7%):
     \[ \text{State Withholding} = 580 \times 0.07 = 40.60 \]

   • Total Deductions:
     \[ \text{Total Deductions} = 44.37 + 81.20 + 40.60 = 166.17 \]

3. Calculate Realized Income:
   \[ \text{Realized Income} = \text{Gross Income} - \text{Total Deductions} \]
   \[ \text{Realized Income} = 580 - 166.17 = 413.83 \]

So, the realized income is $413.83.