Financial Algebra

Unit 1 Notes and

Homework

Spring 2021
Equations Review Name: ______________
 1.1- Looking for Employment (notes)
Where can you go to look for employment?

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•
•
•
•
•

Vocabulary:

Resume ______________________________________________________________________________________

Hourly _______________________________________________________________________________________

Rate _________________________________________________________________________________________

Salary _______________________________________________________________________________________

K ___________________________________________________________________________________________

Pay Periods and hourly rates

Weekly _______________________________________________________________________________________

Biweekly _______________________________________________________________________________________

Semimonthly____________________________________________________________________________________

Monthly_______________________________________________________________________________________

Direct Deposit___________________________________________________________________________________

Hourly Rate___________________________________________________________________________________

Overtime Hours_________________________________________________________________________________

Time-and-a-Half Pay_____________________________________________________________________________

Double-Time Pay________________________________________________________________________________

Gross Pay______________________________________________________________________________________

Minimum Wage ________________________________________________________________________________

Calculating rates of pay, salaries, and/or fees

1. Determine the unit of time (hour, day, week, month, year)
2. Determine the desired conversion
3. Make a fractional equation and solve
Ex 1: Tracy earns $470 per week at her new job. What is her annual salary?

Ex 2: Julianne found a job listed in the classified ads that pays a yearly salary of $41K. What is the weekly salary
based on this annual salary, rounded to the nearest cent?

Ex 3: Karen found a job with an annual salary of $67.3K. What is her monthly pay, rounded to the nearest dollar?

4. Ana found a job online with an annual salary of $32,000. What would her weekly salary, rounded to the
nearest cent, be based on this?

5. Sam was offered a job making $55K per year. Another company offered him a position earning $1,125 a
week. Which position pays more? What is the difference in the weekly salaries of these two jobs?

6. Dylan took a job through an employment agency that pays $395 per week. The agency’s fee is 20% of his first
four weeks of pay. How much money must Dylan pay the agency?

7. Mike got a job through an employment agency that charges a fee equal to 15% of the first five weeks of pay. If the
job pays $475 per week, how much does Mike have to pay in agency fees?

8. The Alpha Employment Agency is advertising a job in the construction field. The agency’s fee is 25% of the first
month’s pay. If the job pays $32.5K per year, how much would be owed to the agency?

9. The Knight Employment Agency has just place Christian in a position that pays $58.3K per year. The
agency fee is equal to 35% of the first four weeks of pay. How much will Christian pay the agency in fees?
Piecewise Function _____________________________________________________________________________
Which piece of the function would you use for each given x-value?

1. f (x) = í
ì
x + 3, x<0
2. g(x) = í
ì
2x, x £ -1

x³0 x > -1
î2x +1, î3x +1,
f (2) f (0) f (–3) f (–4) g (3) g (5) g (–1) g (–4)

We can use piecewise functions to solve problems given different situations.

Ex 1: Ken is a mechanic who owns Ace Auto Repair. He needs a foreign car expert and is placing ad in the
classifieds. The cost of an ad x lines long is given by the following piecewise function.
56, ≤4

( )={
56+6( −4), >4}

a. Find the cost of a four-line ad. b. Find the cost of a twelve-line ad.

Ex 2: A local newspaper charges $13 per line first three lines of a classified ad, and $7.50 for each additional line. The
cost of an ad x lines long is given by the following piecewise function.
13 , ≤3

()={
13 + 7.50( − 3), > 3}

a. Find the cost of a three-line ad. b. Find the cost of a six-line ad.

3. Jane’s Printing Services charges $29.95 to print 200 high quality copies of a one-page resume. Each
additional set of 100 copies cost $14. The cost of x sets of 100 resumes is given by the following piecewise
function.
29.95, 0< ≤2

}
>2
()={
29.95 + 14( − 2),

Find the difference between the cost of 300 resumes and 400 resumes.
Writing Piecewise Functions

4. Teach-Tech is an online job listing site for prospective teachers. The site charges teachers $18 per week for the
first four weeks to post their resumes. After four weeks, the cost is $7 per week. If w represents the number of weeks,
represent the cost c(w) as a piecewise function.

5. A local newspaper charges $15 for the first 4 lines of a want ad, and then $5.50 for each additional line. Express
the cost of an x-line ad, c(x), as a piecewise function.

6. Dakota Printing charges $19.50 for the first 200 copies and $9 for every 100 additional copies. If the number of
sets of 100 resumes is represented by r, express the cost of the resumes, c(r) algebraically as a piecewise function.

7. Klinko’s charges $19.95 to print 14 top-quality single page resumes. Each additional package of 7 copies cost $6.
Express the cost of the resumes, c(r) algebraically in a piecewise function.

Exemplar: Tayler needs a new phone because her parents are cutting her off. She’s not sure which service to go with.
Horizon offers a plan that comes with 3GB of data for $49.95 per month. Any additional data after that is charged at a
rate of $15 per (additional) GB.
• Write a piecewise function to represent the Horizon plan.
• How much does it cost Tayler if she uses 4 GB?
• How much does it cost if she uses 12 GB?

Dash offers unlimited data for the low, low price of $85 per month. How many GB can Tayler use on the Horizon plan before
it becomes too expensive? (At what point do the two plans cost the same?)
 Name: _____________________________________
FA Worksheet 1.1
Looking for Employment Date: _________________Period: ______

1. Danny found an ad for a job that pays $27K annually. What would his monthly salary be if he gets the job?

2. Becky is looking for a new job as an account executive. She responds to a classified ad for a position that pays
$34.5K. What would her weekly salary be to the nearest cent?

3. Eric got a job through an employment agency that charges a fee equal to 40% of the first five weeks of pay. If the
job pays $315 per week, how much does he have to pay the employment agency?

4. Melanie got a job through the Jones Employment Agency. The job pays $32,400 per year, and the agency fee
is equal to 45% of one month’s pay. How much must she pay the agency?
5. Mike is a veterinarian and is placing a classified ad for an assistant. The following piecewise function gives
the price of an x-line ad.
( ) = {45, ≤3 45 + 9( − 3), >3}

a. Find the difference between the cost of a 3-line ad and 4-line ad.

b. Find the cost of a 10-line ad.

6. Michelle got a new job through the McCartney Employment Agency. The job pays $49,400 per year, and the
agency fee is equal to 35% of one month’s pay. How much must Michelle pay the agency, rounded to the nearest
cent?

7. Cathy is looking for a job as a bookkeeper. One classified ad lists a job in a stereo store that pays $34.6K. Another
job, in a clothing store, has a weekly salary of $620.

a. Which job is the higher-paying job?

b. What is the difference in weekly salaries of these two jobs?

8. Mr. Leonard took a job through an employment agency. The job pays $88K per year. He must pay a fee of 22% of
his first four week’s pay. How much money must Mr. Leonard pay the agency, to the nearest cent?

9. Clarissa is considering two job offers. One has an annual salary of $61.1K and the other has an annual salary of
$63.4K. What is the difference in the weekly pay for these two jobs, rounded to the nearest dollar?

10. Arielle owns Levitt Construction Corporation. She needs a welder and is placing a seven-line classified ad. The
cost of an ad that is x lines long is given by the following piecewise function. Find the cost of a seven-line ad.

( ) = { 33 ≤4 }

33+5( −4) >4

11. A local print shop charges $21.50 for the first 200 copies and $10 for every 100 additional copies. If the number of sets
of 100 resumes is represented by r, express the cost of the resumes, c(r), algebraically as a piecewise function.
12. A local newspaper charges $12 for the first 3 lines of a want ad, and then $5.50 for each additional line.
Express the cost of an x-line ad, c(x), as a piecewise function.

13. A print shop charges $12.99 for the first 60 resume copies and $5.50 for every 30 additional resume copies. If
the number of sets of 30 resumes is represented by r, express the cost of the resumes, c(r), algebraically as a
piecewise function.

14. An online job site provides a place for employers to post current openings. The site charges employers $14 per
week for the first four weeks to post their open positions. After four weeks, the cost is $6 per week. If w represents
the number of weeks, represent the cost c(w) as a piecewise function.
 1.2 - Pay Periods & Hourly Rate (notes)
Number of Checks Per Year:

Daily Weekly Biweekly Semimonthly Monthly Quarterly Semiannually

*note: there are 4.3 weeks per month; 3 months per quarter – don’t assume monthly is 4 weeks or quarter is 4 months…

1. Colby is paid semimonthly. How many fewer paychecks does he receive in a year compared to someone who
is paid weekly?

2. Ralph earns $72,000 annually as an architect and is paid semimonthly. Alice also earns $72,000, but is
paid biweekly.
a. How many more checks does Alice receive in a year compared to Ralph?

b. What is the difference between their biweekly pays, rounded to the nearest cent?

3. Last year Beth’s annual salary was $38,500. This year, she received a promotion and now earns $46,462 annually.

a. What was her biweekly salary last year?

b. What is her biweekly salary this year?

c. On a biweekly basis, how much more does she make as a result of her promotion?

Calculating Gross Pay

4. Maureen works at a local Chicken King restaurant. Her regular hourly wage is $9.70. If she regularly works
40 hours per week, what is her regular weekly pay?

5. George works as a cashier and earns an hourly wage of $8.35. If he regularly works 40 hours per week, what is
his gross pay?

6. Hector works in a gas station and earns $8.60 per hour. Last week he worked 29 hours. What was his gross pay?
Calculating Gross Pay

7. Kiera makes $14 per hour. She worked 5 days this week, M-F, in the chart. How much did she make total?
Day Hour Rate Total
Monday 6
Tuesday 7
Wednesday 4.5
Thursday 8
Friday 6.5

8. Katherine works part-time at a coffee shop earning $8.25 an hour. In the last five days, her time card shows
that she worked 2.75, 3.0, 4.25, 3.25, and 4.0 hours. What is her gross pay for the five days?
Day Hour Rate Total

Overtime Pay

9. Amber earns $10.15 per hour. If her regular hours are 40 hours per week and receives time-and-a-half overtime,
find her total pay for a week in which she worked 48 hours.

10. Jake earns $12 per hour at his job. If his regular hours are 40 hours per week and receives double-time for any
overtime, find his total pay for a week in which he worked 50 hours.

11. Julie works at a local grocery store. Her regular hourly wage is $9.50 and earns time-and-a-half for any overtime.

a. What is her gross pay for a week in which she worked 35 hours?

b. If she works 40 hours per week every week, what is her annual salary?

c. What is her gross pay for a week in which she worked 45 hours?
FA Worksheet 1.2 Name: _____________________________________

Pay Periods & Hourly Rates Date: _________________Period: ______

Complete the following chart. Find the amount earned during each pay period. Round answers to the nearest cent.

4. What is the annual salary for someone who earns a biweekly salary of $2,893?

5. Georgie earns an annual salary of $54,790. If she is paid weekly, what is her weekly salary rounded to the nearest
cent?

6. Last year, Ella’s annual salary was $88,441. This year she received a raise and now earns $96,402 annually. She
is paid weekly.

a. What was her weekly salary last year, rounded to the nearest cent?

b. What is her weekly salary this year, rounded to the nearest cent?

c. On a weekly basis, how much more does Ella earn as a result of her raise?
7. Denise works 40 hours per week regularly, at a rate of $12.20 per hour. When she works overtime, she earns time-
and-a-half. What is her hourly overtime rate of pay?

8. Patrick works at a printing company and earns $11.35 per hour. He earns time-and-a-half after 40 hours. If he
worked 48 hours in one week, what was his gross pay?

9. Riley works at a bank and earns $12.25 per hour. She earns time-and-a-half for any time worked over 40 hours. If
she worked 52 hours in one week, what was her gross pay?

10. Julianne works at a local clothing store and earns an hourly wage of $10.25 and earns time-and-a-half for
any overtime.

a. If she works 40 hours per week, what is her weekly pay?

b. If she works 50 hours per week, what is her weekly pay?

11. Krissy worked her 40 regular hours last week, plus 6 hours of overtime at a rate of time-and-a-half. Her gross pay
was $465.50. What was her hourly rate and her overtime rate?
12. Max worked 40 regular hours last week, plus four overtime hours at the double-time rate. If his gross pay was
$576, what was his hourly rate?

Review…

13. Ben found an ad for a job that pays $24K annually. What would his monthly salary be if he gets the job?

14. Becca is looking for a new job as an account executive. She responds to a classified ad for a position that pays
$44.2K. What would her weekly salary be to the nearest cent?

15. Michelle got a new job through the McCartney Employment Agency. The job pays $59,500 per year, and the
agency fee is equal to 30% of one month’s pay. How much must Michelle pay the agency, rounded to the nearest
cent?
 Income from Tips

Calculating Gross Pay That Include Tips

Eyleena makes $7 per hour as a waitress, plus tips. Last night, she worked 6 hours, and earned $54 in tips.
▪
How much did she make last night, in wages?
▪
How much did she make last night, total?
▪
How much did she make per hour, adjusted to include her tips?

• Tips:

• Bonus:

• Average rate:

• Adjusted rate:

1. Corrine is a bellhop at a hotel downtown. She earns $5.50 an hour plus tips. In one 40-hour workweek she earned
$230.00 in tips. What is her total income for the week?

2. Derek works 40 hours a week as a skycap. He earns $3.00 per hour plus tips. In one week, he earned $200.00 in
tips. What is his gross pay for the week?

3. Tasha shampoos hair part-time in a beauty shop. She earns $5.15 per hour for 20 hours a week. If her
average hourly income was $7.85, what were her TIPS for the week?

4. Julie makes $5,000 per month. If the business does well in a year, she gets an annual $10,000 bonus.
What is her adjusted annual income? If she gets paid biweekly, what would be her adjusted biweekly income?
 1.3 - Commissions, Royalties, & Piecework Pay (notes)
Some employees are not paid by the hours they work. Instead, they are paid based on one or more of the following…

Vocabulary:

Commission __________________________________________________________________________________

People who are paid commissions:

Royalties _____________________________________________________________________________________

People who are paid royalties:

Piecework Rate _______________________________________________________________________________

People who are paid piecework rates:

Calculating Commissions or Royalties

Ex 1: Adrianna wrote a textbook for high school students. She receives a 10% royalty based on total sales of the book.
The book sells for $47.95 and 17,000 copies sold last year. How much did Adrianna receive in royalty payments last
year?

Ex 2: John sells new cars at a local dealership. He receives a 25% commission on the profit each car is sold for. Last
month, he sold nine cars for a total of $8,870 dealer profit. How much did John earn in commission?

3. Liz works at Heedle’s Computer Outlet and receives a weekly salary of $200 plus 3.2% commission on her sales.
Last week, she sold $29,700 of computer equipment. How much did Liz earn last week?

4. Allison sells cosmetics part-time and is paid a monthly commission. She receives 11% of her first $900 in sales and
17% of the balance of her sales. Last month she sold $1,250 worth of cosmetics. How much commission did she earn
last month?
5. Oscar sells internet access subscriptions by phone. He receives 12% of the first $1,000 and 15% on the balance over
$1,000. Last month he sold $7,500 worth of internet access subscriptions. What was Oscar’s commission last month?

6. A rock musician is paid 15% on his album sales and tour DVD sales. Last year, he sold one million albums and
550,000 DVD’s. The albums were sold to companies for $5 each and the DVD’s for $6 each.

a. What was the total amount of album sales?

b. What was the total amount of DVD sales?

c. What was the combined total of sales?

d. How much did the musician receive in royalties last year?

Calculating Piecework Pay

Ex. 7. Kate works in a dress factory that makes dresses for designer boutiques. She is paid a piecework rate of $85 per
unit produced. Last week, she made 15 dresses. How much did Kate earn?

8. Martin writes magazine articles and is paid a rate of $75 for each article he writes. Last month, he wrote 14 articles.
What was his gross pay for last month?

9. Sam picks berries at Seymour’s Berry Farm. He receives 28 cents for each small basket picked. Last weekend,
he was able to pick 731 baskets. How much did he earn?

10. Tara picks strawberries and gets paid at a piecework rate of 45 cents per container for the first 200 containers
picked. She receives 65 cents per container for every container over 200 that she picks. Last week, Tara picked
270 containers. What was her gross pay for last week?

11. Barb works in a local factory. She receives 92 cents for each of the first 100 units she produces and $1.01 for
each unit over 100. Yesterday, she produced 120 units. How much did Barb earn for the day?
 Average Income (notes)
Average:

Try it: some seniors with jobs made the following per hour: $10.50; $12.50; $10.75; $15.00; $10.60, $10.50, $10.65
What is this group’s average hourly income?

12. Rick worked 5 days this week. He worked 5.5 hours, 4.5 hours, 8 hours, 6 hours, and 7 hours. How many
hours does he average per day?

13. Donovan carried the football 11 times for 133 yards in the game. What was his average yards per carry?
FA Worksheet 1.3 Name: _____________________________________

Comm., Royalties, & PW Pay Date: _________________Period: ______

1. Alice wrote a textbook for high school students. She receives a 5% royalty based on the total sales of the book.
The book sells for $51.95 and 12,341 copies were sold last year. How much did Alice receive in royalty payments for
last year, rounded to the nearest cent?

2. Peter sells computer parts. He receives a weekly salary of $250 plus an 8% commission on all sales. His sales for
the week total $4,125. How much does he earn this week?

3. Krystal receives a weekly salary of $325 plus a 2.9% commission on all sales. Her sales for the week total $2,485.
What will her gross pay for the week be?

4. Matt sells magazines part-time and is paid a monthly commission based on his sales. He receives 21% of his first
$1,500 in sales and 14% of the balance of his sales. Last month, he sold $2,233 worth of magazine subscriptions.
How much commission did he earn last month?

5. Bobby works at Harry’s Computer Outlet. He receives a weekly salary of $310 plus 3% commission based on his
sales. Last week, he sold $5,492 worth of computer equipment. How much money did Barry earn last week, to the
nearest cent?
6. Jill picks corn and gets paid at a piecework rate of 55 cents per container for the first 300 containers picked. She
receives 60 cents per container for every container over 300 that she picks. Last week, Jill picked 370 containers. How
much did she earn?

7. Joyce works at a furniture store and is paid on commission. She receives 10% on the first $900 in sales and 15% on
the balance of the sales. Last week, she sold $5,300 worth of furniture. What was Joyce’s gross pay?

8. Bill makes a base salary of $9.60 per hour plus a 5% commission on all sales at his current job. Last week,
he worked 35 hours and sold $420 of product. What was his gross pay for the week?

9. Casey is a real estate agent. She earns 8.15% commission on each sale she makes. She sold a house for $577,000 and
another house for $492,000. How much did Casey earn in commission on the sale of these two houses?

10. Carter Cadillac pays commission to its car sales staff. They are paid a percent of the profit the dealership makes
on the car, not on the selling price of the car. If the profit is under $500, the commission rate is 18%. If the profit is
equal to $500 and less than or equal to $2,000, the commission rate is 24%. If the profit is above $2,000, the
commission rate is 27%. If x represents the profit, express the commission c(x) as a piecewise function.
11. Abbey Road Motors pays a percent commission to its sales people. They are paid a percent of the profit the
dealership makes on the car. If the profit is less than or equal to $1,000, the commission rate is 20%. If the profit is
more than $1,000 and less than or equal to $2,000, the commission rate is 24%. If the profit is above $2,000, the
commission rate is 29%. If x represents the profit, express the commission c(x) as a piecewise function.

12. Nikki works in a factory and receives a salary of $9.10 per hour and piecework pay of 15 cents per unit produced.
Last week she worked 40 hours and produced 988 units.

a. What was Nikki’s gross pay for the week?

b. If her boss offered to pay her a straight $13 per hour and no piecework pay, would she earn more or less
than pay under the piecework rate?

13. Bella works in a local factory. She receives $1.04 for each of the first 50 units she produces and $1.22 for each
unit over 50. Yesterday, she produced 72 units. How much did Bella earn for the day?

14. Last week Nick received a total piecework paycheck of $2,493.54. If he receives $1.26 per unit produced,
how many units did he produce last week?
 1.4 - Employee Benefits (notes)
Vocabulary:

Employee Benefits _____________________________________________________________________________

Typical benefits usually include:

Health Insurance ______________________________________________________________________________

Pension ______________________________________________________________________________________

Unemployment Insurance _______________________________________________________________________

Worker’s Compensation ________________________________________________________________________

______________________________________________________________________________________________

Calculating the Annual Salary Including Benefits

1. Ann receives 36K per year as an assistant manager at a clothing shop. Her benefits include health insurance, paid
holidays, retirement contributions, and paid vacation per year. She constructed this table to show the value of each
benefit. What is her annual salary, including benefits?

Benefit Value
Health Insurance $9,375
Paid Holidays $1,245
Retirement Contributions $5,500
Paid Vacation $1,450

2. Quinn receives 48K per year as a store manager. His benefits include health insurance, paid holidays, retirement
contributions, paid vacation, and uniforms per year. He constructed the table to show the value of each benefit. What is
his annual salary, including benefits?

Benefit Value
Health Insurance $10,200
Paid Holidays $915
Retirement Contributions $5,200
Paid Vacation $1,950
Uniform Supplied $3,000

Calculating Employee Benefits

Ex 1: Alan works for a printing company. When he was hired, he was told that he had five days of paid vacation time.
For each year, he gains another 2 days of paid vacation to a maximum of 21 days.

A. How many paid vacation days does he have at the beginning of his fifth year of employment?

B. When will he reach the maximum number of paid vacation days?

Ex 2: When Lisa started at her current job, her employer gave her two days of paid vacation time. For each year, she
gains another 3 days of paid vacation to a maximum of 20 days.

a. How many paid vacation days does she have at the beginning of her sixth year of employment?

b. When will she reach the maximum number of paid vacation days?

3. When Linda started at her current job, her employer gave her four days of paid vacation time. For each year,
she gains another 3 days of paid vacation to a maximum of 24 days. How many paid vacation days does she have
th
at the beginning of her 6 year?

4. When Joe started at his current job, his employer told him that he would receive three vacation days for each year
th
that he works up to a maximum of 24 days. How many days does he have at the beginning of his 5 year?

Calculating Health Care Coverage Costs

1. Gabe contributes 15% of the total cost of his individual health care coverage. He pays $28.80 per week towards
this contribution. What is the total cost of Gabe’s health coverage for the year?

Find the amount Gabe pays in coverage: Write an equation using percentage total:

2. Randy contributes 22% of the total cost of his family health care coverage. He pays $102.50 per paycheck
towards this contribution. If he is paid biweekly, what is the total cost of Randy’s health coverage for the year?

3. Mark contributes $54 semimonthly for health insurance, which is 17% of the total cost. His employer pays the rest.
What is the total cost of Mark’s health insurance?

4. Carrie’s employer offers her family health care. She must contribute 12% of the cost, and her employer will cover
the rest. She gets paid on a monthly basis and notices that $188.50 is taken out of each paycheck for her portion of the
coverage. What is the total cost her employers pay for her coverage?

5. Ryan contributes 18% of the total cost of his individual health insurance. This is a $67.50 deduction from
each of his biweekly paychecks. What is the total cost his employers pay for his insurance?
FA Worksheet 1.4 Name: _____________________________________

Benefits Date: _________________Period: ______

Solve the following.

1. Allie has worked at a fashion magazine for the last five years. When she was hired, she was told that she
had four days of paid vacation time and would earn another three days per year to a maximum of 26
days.
a. How many paid vacation days does she have at the end of five years of employment?

b. How many paid vacation days does she have at the beginning of six years of employment?

2. When Peter was hired at his current job, he was given two paid days of vacation. For each six months
on the job, he gains one additional day. How much vacation time will he have after working 6.5 years?

3. When Tyler started at his current job, his employer gave him five days of paid vacation time. He was also
told that he would earn another three days per year to a maximum of 30 days.

a. How many paid vacation days has Tyler earned after 5 years?

b. When will Tyler reach the maximum number of paid vacation days allowable?
4. Matt’s employee benefits include family health care coverage. He contributes 18% of the cost. If he
gets paid biweekly and $108.00 is taken out of each paycheck, what is the total cost of Matt’s health
insurance?

5. Rachel contributes 20% of the cost of her individual health care. This is a $38 deduction from each of
her weekly paychecks.
a. What is the total cost of her health insurance per week?

b. What is the total cost of her health insurance per year?

6. Jeff’s employee benefits include individual health care coverage. He contributes 25% of the cost. If
he gets paid semimonthly and $67.70 is taken out of each paycheck, how much does his employer
contribute annually for the coverage?
 1.5 - Social Security & Medicare (notes)
Vocabulary:
FICA - Federal Insurance Contributions Act a type of ____________ you pay when you work in the US, that
includes _____________ _______________ and _______________. Also called _______________ taxes.
Social Security - provides _______________ to people after they _______________, and benefits to disabled workers
and sometimes surviving family members if the worker dies.
• You and your employer pay this (6.2% each, as of now)
• You pay the current rate (6.2%) on all your income…
o up to the maximum taxable income (currently
$127,200), o after which you just pay the max ($7,886.40).
• The maximum taxable income can change each year – although the payout barely changes.
Medicare – a _____________ ___________________ program for people 65 years and older.
• You (and your employer) pay for Medicare now, so you can have access to it when you are old or
disabled. (1.45% right now, and on ALL of your income)

Calculating Social Security and Medicare Payments

• If the total is UNDER the maximum taxable income for social security…
• add the percentages (SS 6.2%+ Med 1.45% = FICA 7.65%).
• Multiply the salary by the added percentage, and that’s the annual FICA tax.
• If the total is OVER the maximum taxable income for social security…
• Multiply the maximum taxable income by the SS rate;
• Multiply the TOTAL INCOME by the Medicare rate;
• Add these up to get total FICA taxes paid.

1: Ray got his first job in 2006. In that year, Social Security tax was 6.2% of income up to $94,200 and Medicare tax
was 1.45%. If Ray earned $73,210 in 2006, how much did he pay for both taxes?

2: In 2000, Social Security tax was 6.2% of income up to $76,200 and Medicare tax was 1.45%. If Nick earned
$64,525 in 2000, how much did he pay for both taxes?

3. In 1998, Social Security tax was 7.51% of income up to $45,000. If Grace earned $51,211 in 1998, how
much Social Security tax did she pay?

4. In 2007, Social Security tax was 6.2% of income up to $97,500. If Angie earned $104,500 in 2007, how
much Social Security tax did she pay?

The current tax rate for social security for an employee is ____________ for wages up to ___________________

The current tax rate for Medicare is ______________

Using this information, answer the following questions. Round answers to the nearest cent.
1. Jerry’s gross annual salary last year was $78,000. How much did he pay in Social Security and Medicare taxes?

2. Ana’s gross annual salary last year was $106,800. How much did she pay in Social Security and Medicare taxes?

3. Tara’s gross annual salary last year was $132,400. How much did she pay in Social Security and Medicare taxes?

4. Bill is paid a monthly salary of $7,200. How much did he pay in Social Security and Medicare taxes?

5. In 2005, Faith paid $4,650 in Social Security tax. If the tax rate was 6.2% to the maximum of $90,000 that
year, what was Faith’s taxable income?

6. In 2009, James paid $2281.60 in Social Security tax. If the tax rate was 6.2% to the maximum of $106,800 that
year, what was his taxable income?

Writing Piecewise Functions…Again : ) There are two rules:

1) The taxes paid when income is less than or equal to the maximum
2) The taxes paid when income is greater than the maximum

1. In 1978, the Social Security rate was 6.05% up to a maximum of $17,700 earned. Express the Social Security
tax s(x) for 1978 as a piecewise function.

2. In 1984, the Social Security rate was 6.7% up to a maximum of $37,800 earned. Express the Social Security tax s(x)
for 1984 as a piecewise function.

3. In 2000, the Social Security rate was 6.2% up to a maximum of $76,200 earned. Express the Social Security tax s(x)
for 2000 as a piecewise function.

Solving Piecewise Functions…Again : ) The piecewise function represents the social security taxes for 2009…
0.062 ,
() ={ ≤ 106,800 }

6621.60, > 106,800

1. How much did Dawn pay in Social Security tax if she earned $78,300 in 2009?

2. How much did Jeff pay in Social Security tax if he earned $100,525 in 2009?

3. How much did Dawn pay in Social Security tax if she earned $109,545 in 2009?
FA Worksheet 1.5 Name: _____________________________________

Social Security & Medicare Date: ________________________

Define the following:

1. Social Security

2. Medicare

Solve the following.

3. Dr. Grumman got his first job in 1991. In that year, Social Security tax was 6.2% of income up to $53,400
and Medicare tax was 1.45%. If he earned $41,340 in 1991, how much did he pay for both taxes?

4. In 1998, Lisa earned $149,461.20. In that year, Social Security tax was 6.2% of income up to $68,400 and Medicare
tax was 1.45%. How much did she pay for both taxes?

5. In 2006, Brian earned $72,385. In that year, Social Security tax was 6.2% of income up to $94,200 and Medicare
tax was 1.45%. How much did he pay for both taxes?
6. Bob is paid a biweekly salary of $2,540. How much will he pay in Social Security and Medicare taxes if Social
Security tax is 6.2% of income up to $118,500 and Medicare tax is 1.45%?

7. In 2006, Angie paid $4,650 in Social Security tax. If the tax rate was 6.2% to the maximum of $94,200 that year,
what was her taxable income?

8. This piecewise function represents the Social Security taxes for 2005. How much did Dave pay in Social
Security tax if he earned $69,300 in 2005?

0.062 , ≤ 79,500
( )={
4929,
}
> 79,500
FA Unit 1 Study Guide Name: _____________________________________

Income Date: _________________ Period: ______

Vocabulary you should know…

Employment Agency Minimum Wage Benefits Gross Pay

Commission Royalties Hourly Rate Overtime Rate

Weekly Bi-weekly Monthly Semi-monthly

Answer the following. When necessary, round answers to the nearest cent.

1. Josephine is looking for a new part-time job. She responds to a classified ad for a position that pays $44.5K per
year. What would her weekly salary be?

2. Marley found an ad for a job that pays $27K annually. What would his semimonthly salary be if he gets the job?

3. Sam was offered a job making $55K per year. Another company offered him a position earning $2,125 a week.
What is the difference in weekly pay for these two jobs?

4. Frank got a new job through the Valley Employment Service. The job pays $51K per year, and the agency fee is
equal to 35% of one month’s pay. How much must Frank pay the agency?

5. Derek is placing a classified job for an assistant. The following piecewise function gives the price of an x-line
ad.
32, ≤3

( )={
32+9( −3), >3}

a. Find the cost of a 3-line ad b. Find the cost of an 8-line ad.

6. A local print shop charges $16.00 for the first 100 copies and $7.00 for every 50 additional copies. What does it
cost to buy 350 copies?

7. A print shop charges $12.99 for the first 5 resume copies and $5.50 for every 1 additional resume copies. How
much does it cost to buy 9 copies of your resume?

8. Patrick works at a printing company and earns $11.35 per hour. He earns time-and-a-half after 40 hours. If he
worked 48 hours in one week, what was his gross pay?
9. Carol regularly works a 40-hour week and receives time-and-a-half pay for each hour of overtime she works. If
Carol worked 45 hours last week and her gross pay was $451.25, what was her hourly rate?

10. An author writes a computer self-help manual that sells for $15.95 each. If he receives 10% in royalties on the
total book sales, how much did the author make on the sale of 1740 books?

11. Bella works in a local factory. She receives 45 cents for each of the first 100 units she produces and 62 cents for
each unit over 100. Yesterday, she produced 142 units. How much did Bella earn for the day?

12. James received a total piecework paycheck of $291.81. He receives $0.71 per unit produced. How many units did
he produce?

13. Matt sells magazines part-time and is paid a monthly commission based on his sales. He receives 12% of his first
$1,200 in sales and 18% of the balance of his sales. Last month, he sold $3,250 worth of magazine subscriptions.
How much commission did he earn last month?

14. The Price King Auto Mall pays their sales staff by commission. They are paid a percent of the profit the
dealership makes on each sold car. If the profit is $900 or less, the commission rate is 18%. If the profit is greater than
$900 and less than or equal to $1,500, the commission rate is 20%. If the profit is above $1,500, the commission rate
is 25% of the profit. If x represents the profit, express the commission c(x) as a piecewise function.

15. When Ellie was hired, she was told that she had three days of paid vacation time and would earn another four
days per year to a maximum of 23 days. How many years will it take for her to reach her maximum paid vacation
days?

16. Gabe contributes 15% of the total cost of his individual health care coverage. He pays $28.80 per week
towards this contribution. What is the total value Gabe’s health care coverage for the year?

17. Anton works at First National Bank. His employer offers him a pension retirement plan which will be 1.45% of his
average salary for the last five years of employment for every year worked. Anton is planning on retiring at the end
of this year after 22 years of employment. His salaries for the last five years are $92,000, $92,800, $99,000,
$100,500, and $105.000. Calculate Anton’s pension.

18. In 2008, the Social Security percentage was 6.2% for the first $102,000 earned. The Medicare percentage was
1.45% of your entire salary. If Darby made $143,000 in 2008, how much did he pay in FICA taxes?