Trey morgan is an employee who is paid monthly. for the month of january of the current year, he earned a total of $4,538. the fica tax for social security is 6.2% of the first $127,200 earned each calendar year, and the fica tax rate for medicare is 1.45% of all earnings for both the employee and the employer. the amount of federal income tax withheld from his earnings was $680.70. his net pay for the month is:

Net pay =   $3,857.30

Explanation:

given data

total = $4,538

FICA tax = 6.2%

first earned =  $127,200

Medicare = 1.45%

federal income tax withheld = $680.70

solution

we know that net pay is express as

Net pay = Gross earnings - Federal tax withheld   1

put here value in equation 1 we get

Net pay =  $4,538 - $680.70

Net pay =   $3,857.30

month 1 start amount =$3287.90 interest=(3287.90x0.0145/12)3.97 total to pay=$3291.81 paid =$1200 balance =$2,091.87

month 2 starting amount= $2,091.87 interest =$25.28 total to pay =$2117.15 paid =$1200 balance $917.15

month 3 starting amount =$917.15 interest =$11.08 total to pay =$928.23 paid =$928.23 balance =$0 total to pay 1200+1200+928.23 = $3328.23 it will take 3 months to pay a total of $3328.23