Tyrone’s hourly wage is $18 and his net pay is 72% of his earnings. Tyrone spends about $1,800 on his monthly expenses. If Tyrone works 40 hours per week and has no other sources of income, what is his total monthly cash inflow? (Hint: Assume that there are 4 pay periods per month.)
Options:
a. $273.60
b. $1,080.00
c. $1,800.00
d. $2,073.60
The Correct Answer and Explanation is :
The correct answer is d. $2,073.60.
Explanation:
To calculate Tyrone’s total monthly cash inflow, we need to follow a few steps, breaking it down into his gross earnings and his net pay (after taxes). The problem gives us the following information:
- Tyrone’s hourly wage is $18.
- His net pay is 72% of his earnings (i.e., after taxes, deductions, etc.).
- Tyrone works 40 hours per week.
- There are 4 pay periods per month.
Step 1: Calculate Tyrone’s weekly earnings.
Tyrone works 40 hours per week at $18 per hour.
[
\text{Weekly earnings} = 40 \times 18 = 720
]
Step 2: Calculate his monthly earnings.
Since there are 4 weeks in a month (based on the problem hint), we multiply his weekly earnings by 4:
[
\text{Monthly earnings} = 720 \times 4 = 2,880
]
Step 3: Calculate Tyrone’s net pay.
His net pay is 72% of his monthly earnings. To find his net pay, we multiply his total monthly earnings by 72% (or 0.72):
[
\text{Net pay} = 2,880 \times 0.72 = 2,073.60
]
Thus, Tyrone’s total monthly cash inflow is $2,073.60.
Conclusion:
Tyrone’s total monthly cash inflow, after deductions, is $2,073.60. This reflects his take-home pay, which is the amount he actually receives after the deductions (such as taxes, benefits, etc.) are applied to his gross earnings.