My question is: Janet is trying to decide whether to quit her job and start freelancing. She works 40 hours a week at both jobs. She get paid $30/hour at her current job, and would get paid $40/hour as a freelancer. However, she'd have to pay an extra $25 a week in FICA taxes plus $400/month in healthcare premiums. How much more would Janet make per month as a freelancer if there are four weeks in a month? Your thoughts:
First find the difference in hourly wages: $40 / hour - $30 / hour = $10 / hour. Then multiply that difference by the number of hours she works in a week to find the weekly difference: $10 / hour * 40 hours / week = $400 / week. Then multiply that amount by the number of weeks in a month to find the monthly difference in her earnings: $400 / week * 4 weeks / month = $1600 / month. Then find the total additional amount Janet pays in FICA taxes: $25 / week * 4 weeks / month = $100 / month. Then subtract Janet's extra FICA taxes and healthcare premium from the additional money she earns to find the net increase in her pay from freelancing: $1600 / month - $400 / month - $100 / month = $1100 / month. The final answer: 1100.