You have just been notified by the student aid and scholarships office that you

Question

You have just been notified by the student aid and scholarships office that you would receive a regents' scholarship of $2,000 for the coming academic year. Futhermore, your application for a work-study program has also been accepted. You will be allowed to work up to 15 hours a week at an hourly wage rate of $5.00. The academic year has a total of 30 weeks of school. You estimate that the total deductions from the scholarship and work-study wages would be as follows: scholarship, 5 percent handling charges; work -study, 12 percent tax and 5 percent health insurance. Develop a model that will determine your total cash situation during the next academic year, and define all of the model components.

Explanation / Answer

Answer:-

Receive Scholarship = $2,000

Handling Charge = 5% of Scholarship amount

Working Hours = 15 hours a week

Wagw rate = $5

numbers of weeks = 30 weeks

Total wages (year) = 15 * 5 * 30

           = 2250

Tax rate = 12% of wages

Health Insurance = 5% of wages

Total Cash = (Scholarship amount - Handling charges) + (Total wages - Tax - Health insurance)

= [2000 - (5% of 2000)] + [2250 - (12% of 2250) - (5% of 2250)]

= [2000 - 100] + [ 2250 - 270 - 112.5]

= 1900 + 1867.5

= 3767.5                   

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