Q1: You recently landed the job of a lifetime! Your gross annual salary is $125,000. Before taxes, $120 is taken out for an HSA (Health Savings Account) each paycheck, followed by medical insurance, which is 3.5%. Taxes (Federal, Social Security, and Medicare) are then taken out of your pay. You currently have 3 roommates, with whom you split rent and bills on a $2275 per month townhouse where utilities (gas, water, electric, cable… etc) total another $735. You have an outstanding loan that costs you $250 per month. **Assume there are 2 pay periods (4 weeks) in a month and that you are filing taxes in April 2022.a.
1/ What is your taxable income?
2/ How much is taken out ANNUALLY for Federal Taxes? Social Security? Medicare?
3/ How much money do you have left over at the end of each month after these deductions and expenses are removed?
Q2: You have decided to start saving for retirement. Your bank is willing to set you up with an IRA with a 3.7% APR. You need to have at least $400,000 in the account in 45 years to be able to retire.
How much of your remaining monthly budget do you want to put into the account each month?
Why did you decide on this number? Support your answer with at least 3 sentences.
Q3: A few years down the road you move out, buying your own home. You decide to take another look at your finances. Your outstanding loan of $250 per month only has 10 payments left on it (out of the original 60) with an interest rate of 12.75%.
a/What is the finance charge “f”?
b/What is the unearned interest “u”?
c/How much would it cost to pay it off on payment #51?