The gross income of Abelina Bennett is $215 per week. Her deductions are: $15.16 for FICA tax, $29.33 for income tax, 2% for state tax, 1% for city tax, and 3% for retirement fund. What is her net income? A. $202.10 B. $170.51 C. $57.39 D. $157.61
The gross income of Abelina Bennett is
15.16 for FICA tax,
202.10 B.
57.39 D. $157.61
The Correct Answer and Explanation is:
To find Abelina Bennett’s net income, we need to subtract all deductions from her gross income of $215 per week.
Step-by-step calculation:
1. Fixed deductions:
- FICA tax = $15.16
- Income tax = $29.33
2. Percentage-based deductions:
- State tax (2%) = 2% of $215 = 0.02 × 215 = $4.30
- City tax (1%) = 1% of $215 = 0.01 × 215 = $2.15
- Retirement fund (3%) = 3% of $215 = 0.03 × 215 = $6.45
3. Total deductions:
Now add all deductions:
- $15.16 (FICA)
- $29.33 (Income tax)
- $4.30 (State tax)
- $2.15 (City tax)
- $6.45 (Retirement fund)
Total deductions = 15.16 + 29.33 + 4.30 + 2.15 + 6.45 = $57.39
4. Net income:
Net income = Gross income – Total deductions
Net income = $215.00 – $57.39 = $157.61
✅ Correct Answer: D. $157.61
Explanation:
Net income refers to the amount of money an individual takes home after all applicable deductions are made from their gross income. In this case, Abelina Bennett earns a gross weekly income of $215. From that amount, several deductions are subtracted to arrive at her net income.
Two of her deductions are fixed amounts: $15.16 for FICA (Federal Insurance Contributions Act) tax and $29.33 for federal income tax. In addition to those fixed deductions, she has percentage-based deductions including 2% for state tax, 1% for city tax, and 3% for her retirement fund.
To find the percentage-based deductions, we multiply each percentage by the gross income. For example, 2% of $215 is $4.30, 1% is $2.15, and 3% is $6.45. These are added to the fixed deductions to find the total deductions of $57.39.
Finally, subtracting the total deductions from her gross income yields the net income:
$215 – $57.39 = $157.61.
Thus, Abelina’s net income is $157.61, which represents the actual amount she receives after taxes and contributions. This figure is crucial for budgeting, as it reflects the real funds available for spending and saving. The correct answer is D. $157.61.
