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2. Marcus has been employed by GCD Enterprises for 15 years, and currently earns $60,000 per year. Marcus saves $15,000 per y

Can someone please help with this question?

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Answer #1

The Marcus' wage replacement ratio is computed as shown below:

Earnings per year = $ 60,000

Payroll taxes @ 7.65% = $ 4,590

Savings = $ 15,000

Spending on mortgage = $ 12,000

So the Marcus wage replacement ratio will be:

= ( Earnings - Payroll taxes - Savings - Spending on mortgage ) / Earnings

= ( $ 60,000 - $ 4,590 - $ 15,000 - $ 12,000 ) / $ 60,000

= 47.35%

So the correct answer is option c i.e. 47.35%

Feel free to ask in case of any query relating to this question

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