Question 10 • Financial Math - MA2007
Social Security tax is 6.2% of wages, up to the maximum taxable earnings of $106,800. For $23,660, the tax is $23,660 × 0.062 = $1,466.92; for $89,000, it is $89,000 × 0.062 = $5,518.00. The $166,090 wage exceeds the limit, so tax applies only to $106,800: $106,800 × 0.062 = $6,621.60. These amounts match choice d.
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