Question

Last year, a construction worker had a gross income of $29,700, of which he contributed 7% to his 401(k) plan. If he got paid monthly, how much was deducted from each paycheck for his 401 (k) plan?

Answer 1

$173.25

Explanation:

His annual contribution is ...

0.07 × $29,700 = $2079

If 1/12 of that is contributed each month, the monthly contribution is ...

$2079/12 = $173.25