Question

3% 4% Latisha is graduating from Queens College next semester and she just landed a job at a hospital as a compliance manager. She is excited at the prospect of this new opportunity. She would like to get more organized financially because she believes her new salary will now allow her to move into her own place She talks to her friend, Brad, who sends her his monthly budget. It is a good place to start. Rent in the Bronx, however, is much higher than in New Jersey. Where Brad commutes from, so she will have to budget for $1350 for new apartment per month. Her car payment is also more: $ 285 per month. The good news is that Latisha's new job will be paying her $37.00 per hour. Below is a sample of Brad's budget, which with the exception of the three changes outline above) Latisha plans to utilize to organize her monthly finances. Brad's Budget Income Salary $23.00 per hour 40 hours per week Expenses Federal income tax 22% State income tax Social Security/Medicare 6.2% Medical Insurance $ 64.00 per month Life insurance $15.00 per month 401(K) contribution Savings Rent $750 per month Auto payment $ 230 per month Auto insurance $ 160 per month Water $ 24 per month Gas $60 per month Electricity $75 per month Cable/ Internet $ 140 per month Phone/ Cell phone $93 per month Other Utilities $ 34 per month Round all of your answers to the nearest dollar (no cents). 1. What is Latisha's annual salary (pre-taxes) per year? 2. How much does Latisha have to pay in federal taxes (assume she works 52 weeks a year and 40 hours a week)? 3. what is Latisha's weekly salary(pre-taxes)? 4. What is Latisha's weekly salary ( post-taxes and deductions)? Assume the deductions are per week (per pay period) 5. What is Latisha's monthly salary (post-taxes and deductions)? 6. How much does Latisha have in her account after she has paid all of her bills? Remember that her rent and car payment are different from Brad's 7.Suppose Latisha owes $900 a month in credit card payments. How much of her take home pay (discretionary Funds) is now left? 8.If she wanted to save 5% of what was left after making her credit card payments, how much would that be? 9.After Latisha has paid all of her bills and contributed to her savings. What is she left with for groceries and incidentals? Divide this number by 4 weeks to get the per week amount she is allotting to groceries, shopping, hair products/ haircuts, Entertainment etc.?

Answer 1

1 Latisha's annual pre-tax salary =			37*40*52 =	76960
					apt	1350
2 federal taxes =		16931			car	285pm
3 pretax Weekly salary =		37*40	1480
4 weekly salary post tax and deductions			1031
calculation	pretax weekly salary		1480
	less federal taxes		325.6
	less state income tax		44.4
	less medicare		16
	less life insurance		3.75
	less 401k		59.2
			1031
5 monthly salary post taxes and deductions is 4124
calculation	pretax monthly salary		5920
	less federal taxes		1302.4
	less state income tax		177.6
	less medicare		64
	less life insurance		15
	less 401k		236.8
			4124
6 Balance after paying bills is 1903
	post tax and deductions		4124
	less rent		1350
	less car payment		285
	less car insurance		160
	less water		24
	gas		60
	electricity		75
	cable internet		140
	phone		93
	others		34
			1903
7 takehome pay after credit card payment is 4124-900 =				3224
8 5 percent after credit card payment 3224*5% =				161
9 balance after bills and savings
	post tax and deductions		4124
	less credit card		900
	less savings		161
	less rent		1350
	less car payment		285
	less car insurance		160
	less water		24
	gas		60
	electricity		75
	cable internet		140
	phone		93
	others		34
	monthly balance		842
	weekly balance		211