There is a sale on computers at your local Comp2u. The gaming system that you are interested in has the latest Intel Quad core processor and duel NVIDIA GeForce 9800S graphics card. The sale price on the computer is $1,500.00 plus 5.1% sales tax. Your monthly gross salary is $2,500. How much will you have saved over a two month period and will you be able to afford the computer, given your monthly expenses total $1,250, Social Security is 6.2% of your biweekly income, Medicare is 1.45% of your biweekly income, and you pay State and Federal taxes in the amount of $45.00 and $89.51 biweekly respectively?
Assuming two biweekly paychecks per month, gross pay per paycheck is $2,500 ÷ 2 = $1,250. Each paycheck has $77.50 Social Security, $18.13 Medicare, and $45 + $89.51 in other taxes, leaving about $1,019.86; over four paychecks, that is $4,079.44. Subtract two months of expenses ($2,500), and you save $1,579.44. The computer costs $1,500 × 1.051 = $1,576.50, so you can afford it; choice C is correct.
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