Nitai, who is single and has no dependents, was planning on spending the weekend repairing his car. On friday, nitai's employer called and offered him $125 in overtime pay if he would agree to work over the weekend. Nitai could get his car repaired over the weekend at autofix for $90. If nitai works over the weekend, he will have to pay the $90 to have his car repaired but he will earn $125. Assume nitai pays tax at a flat 12 percent rate.

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Business

Nick Hawkins

24 June, 11:26

Nitai, who is single and has no dependents, was planning on spending the weekend repairing his car. On friday, nitai's employer called and offered him $125 in overtime pay if he would agree to work over the weekend. Nitai could get his car repaired over the weekend at autofix for $90. If nitai works over the weekend, he will have to pay the $90 to have his car repaired but he will earn $125. Assume nitai pays tax at a flat 12 percent rate.

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Tanya Hahn · Answer 1

Answer: Nitai is better off working over the weekend.

Explanation:

When Nitai plans to work over the weekend, she gets $125 out of which she pays $15 (i. e $125*0.12) is tax. So, she is left with $125 - $15 = $110 income. If she pays for her repair which costs her $90 she will be left with $110 - $90 = $20.

If she does not work over the weekend, she will have no income and she will have to pay no taxes. Neither will she have money to pay for her car repairs.

So, Nitai is better off working over the weekend as she gets a surplus of $20.