Question

Petunia earns $72,000 per year. If her federal income tax rate is 16% and she also pays 6.2% Social Security tax and 1.45% Medicare tax, what amount is withheldfrom her annual income for these taxes?A$17,028.00B$16,092.35C$11,520,00D$16,308.00

Answer 1

This problem is about percentages.

The total earnings are $72,000.

We know that income tax is 16%, Social Security is 6.2% and Medicare tax is 1.45%. To find the total amount of money Petunia pays in taxes, we need to multiply her earnings with each percentage in decimals, remember that 16% is 0.16, 6.2% is 0.062 and 1.45% is 0.0145.

Income tax

$I=72,000\cdot0.16=11,520$

Social Security

$S=72,000\cdot0.062=4,464$

Medicare tax

$M=72,000\cdot0.0145=1,044$

So, the total amount of money paid would be the sum

$T=11,520+4,464+1,044=17,028$

Therefore, the right answer is A.