An employee makes an hourly rate plus any tips they earn. This tip employee made a total of $400 by working 28 hours last week. If $253 of their total earnings was their tips, what is their hourly rate of pay?

Subtract the $253 in tips from the $400 total to find the employee’s hourly wages: $400 − $253 = $147. Divide $147 by 28 hours: $147 ÷ 28 = $5.25 per hour. The hourly rate is $5.25, choice A.

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