Question

You plan on purchasing a car in the next year. The car that you are interested in lists for $23,000 after taxes, license, and doc fees. You currently have two-thirds of the vehicles value saved and you get paid $1,312.00 twice a month. Given that monthly expenses total $1,150.12, Social Security is 6.2% of your income, Medicare is 1.45% of your income, and you pay State and Federal taxes in the amount of $53.00 and $101.35, respectively, twice a month, determine in how many months you will have to save for so that you can purchase the car without financing. Round all your answers to the nearest cent. Round your answer to the nearest month. a. 7 months c. 8 months b. 6 months d. 9 months Please select the best answer from the choices provided

Answer 1

c. 8 months.

Explanation:

First off let's get the current total of how much we have saved.

2/3 of $23,000 = 15,333.33.

Now we need to get our total salary to calculate for our Social Security and Medicare.

Total Salary : $1312.00 x 2 = $2,624.00

Social Security : 6.2% or 0.062 x 2,624 = $162.69

Medicare : 1.45 or 0.0145 x 2,624 = $38.05

Now that we have our Social Security and Medicare, we can then solve for our taxes.

Taxes: $53 + $101.35 = 154.35 x 2 = $308.7

Now we can add our monthly expenses to the other expenses.

Monthly Expenses : $1,150.12

1,150.12 + 162.69 + 38.05 + 308.7

= $1659.56 Total Expenses.

Now that we have our total expenses we simply subtract it to our monthly salary.

2624.00-1659.56

= $964.44 Extra Money Monthly

Now we proceed to solve for how much more we need to make the total payment.

23000 - 15,333.33

= 7666.67

Now that we have out total balance, we just need to divide the balance to our extra money monthly.

7666.67 / 964.44

= 7.949 Months or 8 Months