Question

Ayana works at Eastern Community College as a math teacher. She will
be paid $45,000 for the year.
• She will have to pay for Medicare, Social Security, and Taxes which
amount to 22.4% in deduction of the gross amount.
• She will also have to pay $3 per month for a life insurance policy of
$25,000.
• Her health and dental (or medical insurance premiums) are $85 per
month.
• Finally, the company would require her to automatically invest $200
per month for retirement.
If she is paid monthly, what is her NET MONTHLY INCOME?

a. $2622.00 c. $2910.00
b. $2833.33 d. $3750.00

Answer 1

Answer:

  a.  $2622.00

Step-by-step explanation:

After taking out federal health insurance taxes, Ayana's pay for the year will be ...

  $45000 × (1 - 0.224) = $45000 × 0.776 = $34,920

On a monthly basis, that is ...

  $34,920/12 months = $2910 per month

Then, additional deductions of $3 + 85 + 200 = $288 are made, so her pay will be ...

  $2910 -288 = $2622 per month

_____

Comment on federal taxes

Federal income taxes are not accounted for in the problem statement. If Ayana can claim "head of household" status (and is not married), she will have federal income tax on the order of $121 per month deducted from the above amount, assuming her retirement plan deduction is "before tax."