Suppose that you work at the Peacock Blue store for 40 hours over five days at a rate of $10.25/hour. You then quit your job. Deductions are FICA (7.65%), federal withholding (15%), and state withholding (10%). Your expenses are transportation at $5.25/day, lunch at $3.85/day, and black slacks required for work at $19.95. How much is your discretionary income for the week?(1 point)Responses$364.50$364.50$344.55$344.55$230.63$230.63$210.68
To calculate your discretionary income, we need to first calculate your gross income, then subtract the deductions and expenses.
Gross income = hours worked * hourly rate = 40 * $10.25 = $410
FICA deduction = gross income * 7.65% = $410 * 0.0765 = $31.37
Federal withholding = gross income * 15% = $410 * 0.15 = $61.50
State withholding = gross income * 10% = $410 * 0.10 = $41
Total deductions = FICA deduction + federal withholding + state withholding = $31.37 + $61.50 + $41 = $133.87
Expenses = transportation + lunch + black slacks = $5.25 + $3.85 + $19.95 = $29.05
Discretionary income = gross income - total deductions - expenses = $410 - $133.87 - $29.05 = $247.08
Therefore, your discretionary income for the week is $247.08.