Bill is buying healthcare on an exchange. The normal monthly price of the plan he wants is $500. The government will pay for part of this cost depending on Bill's income: 90% if he makes less than $10,000, 50% if he makes between $10,001 and $40,000, and 20% if he makes more than $50,000. Bill earns $25/hour and works 30 hours per week, four weeks per month. How much will Bill spend for health insurance in a year? Let's answer step by step:
First find how much money Bill makes every week by multiplying his hourly rate by the number of hours he works each week: $25 / hour * 30 hours / week = $750 / week. Then multiply that number by the number of weeks per month to find his monthly earnings: $750 / week * 4 weeks / month = $3,000 / month. Then multiply his monthly earnings by the number of months in a year to find his annual income: $3,000 / month * 12 months / year = $36,000 / year. This income means Bill gets a 50% monthly healthcare subsidy from the government. Multiply the cost of the premium by 50% to find the monthly cost Bill pays: $500 / month * .5 = $250 / month. Finally, multiply Bill's monthly cost by the number of months in a year to find his annual cost: $250 / month * 12 months / year = $3,000 / year. The answer: 3000.