Question

Amy works in a shop. Her annual gross salary is $25,000. From this, she must pay social security (calculated as 12% of her gross pay) plus 8% income tax. In addition to taxes, she must repay a loan to her employers at a rate of $125 per month, which comes out of her post tax income (i.E. Income after tax has been calculated). What is Amy's take home pay per annum? Give your answer in dollars to the nearest dollar.

Answer 1

$18,500

Explanation:

To find Amy's take home pay per annum, you have to calculate the amount she has to pay on taxes, subtract this from her annual gross salary. Then, you have to deduct from the remaining amount the loan she has to repay to her employers.

Gross salary= $25,000

Social security= $25,000*12%= $3,000

Income tax= $25,000*8%=$2,000

Gross salary-taxes= $25,000-$5,000= $20,000

Loan= $125*12= $1,500

$20,000-$1,500= $18,500

Amy's take home pay per annum is $18,500.

Answer 2

$18,500

Explanation:

Amy's taxes total 20% of her pay, and the loan payments total another ...

$125 × 12 = $1500

so her annual take-home pay is ...

$25000(0.80) -1500 = $20,000 -1,500 = $18,500

Amy's annual take-home pay is $18,500.