You have that:
- Her contribution from her salary to her 401(k) plan, is: 12%.
- Her annual salary is: $55,700.
Then, to solve this problem and calculate her pretax income, you must following the steps below:
1. You must calculate the amount that Violet contributed to her 401(k) plan. So, you have:
12%/100=0.12
($55,700x0.12)=$6,684
2. Now, you must subtract her annual pay ($55,700) by the amount obtained ($6,684), as below:
Pretax income= $55,700-$6,684
Pretax income=$49,016
What is her pretax income?
The answer is: Her pretax income is $49,016