Financial Maths, STD2 EQ-Bank 02

Kylie is a financial broker who earns a salary of $\$93\,600$ per annum.
She has 35% of her salary deducted for tax.
Show that her net weekly pay is $1170. (1 marks)
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Ben, Kylie's partner, works as a carpenter.
He works 36 hours per week at a normal rate of $40 per hour and averages 6 hours overtime at time-and-a-half.
Show that his average weekly pay before tax is $1800. (2 marks)
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Kylie and Ben drew up the weekly budget below.
They need to save $400 per week for an overseas holiday and also want to continue to save for a home.
Ben has 25% of his gross wage deducted for taxation.
Comment on the budget as it appears in the table, indicating where they may have made an error, and suggest some practical ways to make the budget work for them. (3 marks)
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Show Answers Only

a.	$\text{Kylie’s net salary}$	$=\dfrac{$93\,600\times 0.65}{52}$
		$=$1170$

b.	$\text{Ben’s gross pay}$	$=$40\times (36+1.5\times 6)$
		$=$1800$

$\text{They have mistakenly used Ben’s gross salary in their}$

$\text{calculations which will leave them short of their savings}$

$\text{target of }$500\ \text{per week by } $200. $

$\text{Option 1. Reduce savings by }$200\ \text{per week.}$

$\text{Option 2. Reduce entertainment by by }$100 $

$\text{per week and reduce savings by }$100\ \text{per week.}$

Show Worked Solution

a.	$\text{Kylie’s net salary}$	$=\dfrac{93\,600\times 0.65}{52}$
		$=$1170$

b.	$\text{Ben’s gross pay}$	$=40\times (36+1.5\times 6)$
		$=$1800$