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Henry earns [tex]\$68,000[/tex] per year, receives 15 days of PTO, [tex]8\%[/tex] retirement matching, and receives [tex]70\%[/tex] employer-subsidized health insurance which totals [tex]\$10,000[/tex]. Calculate the benefit rate.

\begin{tabular}{|l|c|}
\hline
\multicolumn{2}{|c|}{Employee Benefits} \\
\hline
Health Insurance & [tex]70\%[/tex] \\
\hline
FICA & [tex]7.65\%[/tex] \\
\hline
Paid Vacation (PTO) & 15 days \\
\hline
Retirement Matching & [tex]8\%[/tex] \\
\hline
\end{tabular}

[tex][?]\%[/tex]

Round to the nearest percentage point.



Answer :

GinnyAnswer
To determine the benefit rate for Henry, we need to calculate the total value of his benefits and then express that value as a percentage of his annual salary. Here's the step-by-step solution:

1. Calculate the value of the employer-subsidized health insurance:

Henry receives a 70% subsidy on a health insurance cost of [tex]$10,000. \[ \text{Health Insurance Subsidy} = 10000 \times \frac{70}{100} = 7000 \] 2. Calculate the value of the retirement matching: Henry receives an 8% matching on his annual salary of $[/tex]68,000.
[tex]\[ \text{Retirement Matching} = 68000 \times \frac{8}{100} = 5440 \][/tex]

3. Calculate the FICA contribution:

FICA is calculated at 7.65% of Henry's annual salary.
[tex]\[ \text{FICA Contribution} = 68000 \times \frac{7.65}{100} = 5202 \][/tex]

4. Calculate the value of the Paid Time Off (PTO):

Assuming there are 260 workdays in a year (5 days per week for 52 weeks), calculate the value of the 15 days of PTO.
[tex]\[ \text{Daily Salary} = \frac{68000}{260} \][/tex]
[tex]\[ \text{PTO Value} = \text{Daily Salary} \times 15 = \left(\frac{68000}{260}\right) \times 15 = 3923.08 \][/tex]

5. Calculate the total benefits:

Sum the values of all the benefits.
[tex]\[ \text{Total Benefits} = 7000 + 5440 + 5202 + 3923.08 = 21565.08 \][/tex]

6. Calculate the benefit rate as a percentage of the salary:

[tex]\[ \text{Benefit Rate} = \left(\frac{21565.08}{68000}\right) \times 100 = 31.71\% \][/tex]

7. Round to the nearest percentage point:

The benefit rate percentage can be rounded to the nearest whole number.
[tex]\[ \text{Rounded Benefit Rate} = 32\% \][/tex]

Therefore, the benefit rate for Henry is [tex]\( \boxed{32\%} \)[/tex].

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