8
QuizMultiple Choice

Rational Equations in Financial Contexts — Quiz

Question 8 • Financial Math

An employee wants to save 18% of her gross income for retirement. Her company contributes 4.5% of each employee's gross income to a retirement savings account. The employee is also saving $⁢75 per paycheck. Complete the equation to determine what the employee's gross income, x , needs to be for the savings rate to be 18%

Answer
A
0.18=75 + 0.045⁢xx
B
0.045=x75 + 0.18⁢x
C
0.045=75 + 0.18⁢xx
D
0.18=x75 + 0.045⁢x

Explanation

The total saved per paycheck is the employee’s $75 plus the company’s contribution of 4.5% of gross income, or 0.045x. The savings rate is that total divided by gross income x, so the equation is 0.18 = (75 + 0.045x)/x. This is choice A.

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