You are planning a trip to Disney World in Florida. You estimate for week at Disney World, you will need $1,600.00 (This includes Airfare, room and board, daily expenses, and travel). You save for 5 months and your monthly gross salary is $1,675.00. Given that Social Security is 6.2% of your biweekly income, Medicare is 1.45% of your biweekly income, your monthly expenses are $975.23, and you pay State and Federal taxes in the amount of $35.00 and $75.51 respectively biweekly, how much will you have saved up and will you have saved enough to visit Disney World in December? Round all your answers to the nearest cent.
Treat the monthly salary as two biweekly paychecks, so each paycheck is $1,675 ÷ 2 = $837.50. Each paycheck has $51.93 for Social Security, $12.14 for Medicare, and $35.00 + $75.51 in state and federal taxes, leaving $662.92. After two paychecks and monthly expenses of $975.23, you save $2($662.92) − $975.23 = $350.61 per month; over five months, that is $1,753.05. That is more than the $1,600 trip cost, so choice C, “$1,753.05; yes,” is correct.
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