Math in the Workplace - Algebra/Numbers and Operations
MICRON TECHNOLOGY, INC.
Semiconductor Manufacturing
Benefits Manager
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Job Description: Responsible for the development,
implementation and maintenance of the company's benefits programs including
time off, sick pay, unemployment, retirement plans, disability, and
group and life insurance. |
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Problem:
An employee's 401(k) contributions plus his employer's matching contributions and ROE contributions must be less than or equal to 25% his gross pay (minus insurance premiums and 401 (k) contributions.)
Employees whose percentage is greater than 25% are entitled to a refund.
If my salary and contributions match those listed below, what is my actual percentage? What should my 401(k) refund be to decrease the percentage to 25%?
| IRS formula: |
K + M + R = .25 (G - K - P) |
| K = $3,000 401(k) contributions |
| M = $1,500 Employer's matching contributions |
| R = $400 ROE contributions |
| G = $20,000 Gross Pay |
| P = $800 Pre-tax Insurance Premiums |
 MICRON TECHNOLOGY, INC.
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Solution:
| Actual Percentage = |
3000 + 1500 + 400
20000 - 3000 - 800 |
= |
4900
16200 |
= .302 (30.2% actual percentage) |
| Allowable Contributions = |
x + 1500 + 400
20000 - x - 800 |
= .25 |
x = $2,320
Refund = Actual Contributions - Allowable Contributions
Refund = K - x
3000 - 2320 = $680 Refund