Financial literacy

Hours Needed to Earn $8,425

To calculate the total hours needed, divide the total income goal by the hourly rate.

Formula: Total IncomeHourly Rate=HoursTotal Income divided by Hourly Rate equals Hours
T
o
t
a
l
I
n
c
o
m
e
H
o
u
r
l
y
R
a
t
e
=
H
o
u
r
s
Calculation: $8,425$10.25/hour821.95$ 8 comma 425 divided by $ 10.25 / hour is approximately equal to 821.95
$
8
,
4
2
5
$
1
0
.
2
5
/
h
o
u
r
8
2
1
.
9
5
hours
Answer: You would need to work approximately 822822
8
2
2
hours.

b) Income Tax Calculation

To determine the tax owed, multiply the total income by the tax rate (15%15 %

or 0.150.15

Formula: Total IncomeTax Rate=Taxes OwedTotal Income cross Tax Rate equals Taxes Owed
T
o
t
a
l
I
n
c
o
m
e
T
a
x
R
a
t
e
=
T
a
x
e
s
O
w
e
d
Calculation: $8,4250.15=$1,263.75$ 8 comma 425 cross 0.15 equals $ 1 comma 263.75
$
8
,
4
2
5
0
.
1
5
=
$
1
,
2
6
3
.
7
5
Answer: You would owe $1,263.75$ 1 comma 263.75
$
1
,
2
6
3
.
7
5
in taxes.

c) College Savings Calculation

To find the amount saved, multiply the total household income by the savings rate (5%5 %

or 0.050.05

). Assuming a $48,948 household income based on common versions of this task.

Formula: Household IncomeSavings Rate=Savings AmountHousehold Income cross Savings Rate equals Savings Amount
H
o
u
s
e
h
o
l
d
I
n
c
o
m
e
S
a
v
i
n
g
s
R
a
t
e
=
S
a
v
i
n
g
s
A
m
o
u
n
t
Calculation: $48,9480.05=$2,447.40$ 48 comma 948 cross 0.05 equals $ 2 comma 447.40
$
4
8
,
9
4
8
0
.
0
5
=
$
2
,
4
4
7
.
4
0
Answer: Your parents would have saved $2,447.40$ 2 comma 447.40
$2,447.40 in one year.

Comments