Question

Hannah, age 70 and single, is claimed as a dependent by her daughter. During 2019, Hannah had interest income of $2,550 and $850 of earned income from babysitting. Hannah's taxable income is:

a) $700.
b) $900.
c) $2,200.
d) $2,550.
e) None of these.

Answer 1

Mary Ann can indeed save 10% of her monthly after-tax income, which would amount to $258.91. Her total monthly expenses add up to $2,145, which means she can achieve her savings goal and still have $185.19.Correct answer is e.None of these.

Step-by-step explanation:

When constructing a budget table for Mary Ann, who is single and has a monthly after-tax income of $2,589.10, we aim to help her save 10% of her income.

We will look at her monthly expenses, which are: rent $790, cell phone $75, utilities $45, cable TV and internet $65, groceries $450, entertainment $250, car payment $350, and gasoline $120. Adding these expenses gives us a total of $2,145. Mary Ann aims to save $258.91 a month (10% of her income), which is feasible since her expenses are less than her after-tax income.

Budget Table for Mary Ann:

• Rent: $790
• Cell phone: $75
• Utilities: $45
• Cable TV and Internet: $65
• Groceries: $450
• Entertainment: $250
• Car Payment: $350
• Gasoline: $120
• Total Expenses: $2,145
• Planned Savings: $258.91
• Income After Expenses and Savings: $185.19