Question

Mustafa contributes 11% of his $67,200 annual salary to his 401 (k) plan. what is his pretax income

Answer 1

You have to subtract the 11% that you are putting into your 401k to find out how much you are earning and that you're not putting into retirement.

67,200*0.11 = 7,392

67,200 - 7,392 = 59,808

Explanation : Hope it helps...

Answer 2

Mustafa's pretax income is $59,808.

Explanation:

Given in the question Mustafa's annual salary = $67,200

and Mustafa contribute 11% of his salary to his 401k plan.

Since we know that 401 k plan is a retirement plan in which an employee gets the exemption from his salary on a pretax basis.

Therefore exemption will be = 11% of

$67,200

= 67,200×0.11

= $7,392

Now pretax income or taxable income = 67,200-7,392 = $59,808

Therefore, pretax income of Mustafa is $59,808.