You are planning a trip to Spain in the summer of 2009. You estimate for an entire month in Spain, you will need $7,139.00 (This includes Airfare, room and board, daily expenses, and a Eurail Pass). You save for 7 months and your monthly gross salary is $2770.22. Given that Social Security is 6.2% of your semi-monthly income, Medicare is 1.45% of your semi-monthly income, your monthly expenses are $1,200, and you pay State and Federal taxes in the amount of $52.00 and $101.00 respectively semi-monthly, how much will you have saved up and will you have saved enough to visit Spain in August? Round all your answers to the nearest cent.
Social Security and Medicare together take 6.2% + 1.45% = 7.65% of your monthly salary, or about $211.92. State and federal taxes are $52 + $101 = $153 per semi-monthly paycheck, so they total $306 per month. After taxes and $1,200 in monthly expenses, you save about $1,052.30 per month; over 7 months, that is about $7,366.09 (choice a lists $7,366.10). Since this is more than the $7,139 trip cost, you will have saved enough.
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