Question

Assume your gross pay per pay period is $5,200.00 and you are in the 33 percent tax bracket. Calculate your net pay and spendable income if you save $520.00 per pay period in a tax-sheltered annuity. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) Answer is complete but not entirely correct. Net Pay & Spendable Income $ 3,484 $ 2,964 Net pay Spendable income

Answer 1

To calculate the net pay and spendable income , we need to first find out the tax amount deducted from the gross pay.

Tax amount = gross pay * tax rate = $5,200.00 * 0.33 = $1,716.00

Net pay = gross pay - tax amount - saving amount = $5,200.00 - $1,716.00 - $520.00 = $2,964.00

Spendable income = net pay + saving amount = $2,964.00 + $520.00 = $3,484.00

Therefore, the net pay is $2,964.00 and the spendable income is $3,484.00. Remember to round the answers to the nearest whole dollar.

Step-by-step explanation: