Answered

Chin needs more money in his net pay each month, so he plans to reduce his federal income tax deduction from [tex]12\%[/tex] to [tex]11\%[/tex]. His monthly gross pay is [tex]\$3,500[/tex], and his deductions before the change are listed in the table.

\begin{tabular}{|c|c|}
\hline Deduction & Dollar Amount \\
\hline Federal Income Tax & \$420 \\
\hline State Income Tax & \$95 \\
\hline Social Security & \$89 \\
\hline Medicare & \$40 \\
\hline
\end{tabular}

What will be his new monthly net pay? Round your answer to the nearest dollar.

A. \$2821
B. \$2857
C. \$2860
D. \$2891



Answer :

GinnyAnswer
To determine Chin's new monthly net pay after reducing his federal income tax deduction from 12% to 11%, we need to follow these steps:

1. Calculate the new federal income tax deduction:
- Federal income tax percentage is reduced to 11%.
- Chin's monthly gross pay is \$3,500.
[tex]\[ \text{New Federal Income Tax} = 3,500 \times 0.11 = 385 \][/tex]

2. Sum up all deductions including the new federal income tax:
- Federal Income Tax: \$385 (new value)
- State Income Tax: \$95
- Social Security: \$89
- Medicare: \$40

Adding these together,
[tex]\[ \text{Total Deductions} = 385 + 95 + 89 + 40 = 609 \][/tex]

3. Calculate the new monthly net pay:
[tex]\[ \text{New Monthly Net Pay} = 3,500 - 609 = 2891 \][/tex]

Therefore, Chin's new monthly net pay, rounded to the nearest dollar, is \$2891.