Question

6. Maria earns $10 an hour and pays an

effective tax rate of 18 percent. She recently
got a medical bill for $1,200. If she uses her
HSA to pay the bill, how many hours will she
have to work to cover that cost?

Answer 1

Maria will need to work approximately 146.34 hours at a net earning rate of $8.20 per hour after an 18% tax to pay off a $1,200 medical bill with her HSA.

Step-by-step explanation:

Maria earns $10 an hour before taxes. Given her effective tax rate of 18%, her net earnings per hour would be calculated as $10 × (1 - 0.18) = $10 × 0.82 = $8.20. Now, to cover a medical bill of $1,200 using her HSA, we need to calculate how many hours she needs to work by dividing the total bill amount by her net earnings per hour.

Hours needed = Total Bill / Net Earnings Per Hour = $1,200 / $8.20.

To find the number of hours Maria has to work to pay off the medical bill, we simply perform the division: 1200 / 8.20 ≈ 146.34 hours.

Therefore, Maria will need to work approximately 146.34 hours to earn enough money to pay her $1,200 medical bill after taxes.