explain anwser
You have a part-time job that pays $4.70/hr and average tips are $3.85/hr. Your deductions are FICA (7.65%), federal tax withholding (12.3%), and state tax withholding (8.2%). You work 13 hr/wk. You save 15% of your realized income each week. How much do you save per month?
Anwser is: 47.92
To calculate how much you save per month, you first need to calculate your total weekly income before deductions.
Total weekly income = (hourly rate x hours worked) + average tips
Total weekly income = ($4.70/hr x 13 hrs) + $3.85/hr
Total weekly income = $61.10 + $3.85
Total weekly income = $64.95
Next, calculate your total deductions:
FICA deduction = 7.65% of total weekly income
FICA deduction = 0.0765 x $64.95
FICA deduction = $4.96
Federal tax withholding = 12.3% of total weekly income
Federal tax withholding = 0.123 x $64.95
Federal tax withholding = $8.00
State tax withholding = 8.2% of total weekly income
State tax withholding = 0.082 x $64.95
State tax withholding = $5.33
Total deductions = FICA + federal tax withholding + state tax withholding
Total deductions = $4.96 + $8.00 + $5.33
Total deductions = $18.29
Realized income = total weekly income - total deductions
Realized income = $64.95 - $18.29
Realized income = $46.66
Now, calculate how much you save per week:
Amount saved per week = 15% of realized income
Amount saved per week = 0.15 x $46.66
Amount saved per week = $7.00
To find out how much you save per month, simply multiply the amount saved per week by the number of weeks in a month:
Amount saved per month = $7.00 x 4 weeks
Amount saved per month = $28.00
Therefore, you save $28.00 per month.