Chin needs more money in his net pay each month, so he plans to reduce his federal income tax deduction from 12% to 11%. His monthly gross pay is $3,500, and his deductions before the change are listed in the table.DeductionDollar AmountFederal Income Tax$420State Income Tax$95Social Security$89Medicare$40 What will be his new monthly net pay? Round your answer to the nearest dollar.
At 11% of his $3,500 gross pay, Chin’s new federal income tax deduction is $385. His other deductions total $95 + $89 + $40 = $224, so his new net pay is $3,500 − $385 − $224 = $2,891. The correct choice is $2,891.
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