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
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• Calculation: $8,425$10.25/hour821.95$ 8 comma 425 divided by $ 10.25 / hour is approximately equal to 821.95
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• 8
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• 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 %

1

5

%

or 0.150.15

0

.

1

5

).

• Formula: Total IncomeTax Rate=Taxes OwedTotal Income cross Tax Rate equals Taxes Owed
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• Calculation: $8,4250.15=$1,263.75$ 8 comma 425 cross 0.15 equals $ 1 comma 263.75
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• Answer: You would owe $1,263.75$ 1 comma 263.75
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• in taxes.

c) College Savings Calculation

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

5

%

or 0.050.05

0

.

0

5

). 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
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• Calculation: $48,9480.05=$2,447.40$ 48 comma 948 cross 0.05 equals $ 2 comma 447.40
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• Answer: Your parents would have saved $2,447.40$ 2 comma 447.40
• $2,447.40 in one year.