13
QuizMultiple Choice

Income and Expenses — Test

Question 13 • Financial Math

An employee who is saving for retirement wants the ratio of savings to gross income to be 15% Her employer contributes 5% of each employee's gross income to a retirement savings account. The employee is also saving $⁢95 per paycheck. Complete the equation that can determine the amount she has to make, x , for her savings rate to be 15%

Answer
A
0.15=x95 + 0.05⁢x
B
0.05=x95 + 0.15⁢x
C
0.05=95 + 0.15⁢xx
D
0.15=95 + 0.05⁢xx

Explanation

The total saved per paycheck is the employee’s $95 plus the employer’s contribution of 5% of gross income, or 0.05x. To make savings 15% of gross income, divide that total by gross income x and set it equal to 0.15: 0.15 = (95 + 0.05x)/x. This is choice D.

AI-written and checked against the verified answer.

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