financial algebra

Question

The Medicare tax is 1.45%. If Taylor had $1,346.76 withheld last year for the Medicare tax, then use those facts to determine Taylor's annual salary and then the Social Security tax that was withheld last year (6.2%)

Answer 1

Taylor's salary was multiplied by the Medicare percentage factor in order to find her deduction. We'll turn that operation backward to find her salary, but first convert 1.45% to a decimal by moving the decimal point 2 places to the left:

1.45%=0.0145

Next, divide her Medicare deduction by 0.0145:

$1,346.76/0.0145=$92,880

Taylor's salary was $92,880, which we multiply by the Social Security deduction factor.

Again, convert 6.2% to a decimal by moving the decimal point 2 places to the left:

6.2%=0.062

Now, multiply $92,880 by 0.062:

$92,880•0.062=$5758.56

So, $5758.56 was deducted for Social Security.

I hope that helps you understand!