Let's go through the problem step-by-step to determine Chin's new monthly net pay after reducing his federal income tax deduction from 12% to 11%.
1. Calculate the Federal Income Tax Deduction Before and After the Change:
- Before the change, Chin's federal income tax deduction is \[tex]$420.
- Chin's gross pay is \$[/tex]3500, so reducing his federal income tax deduction to 11% means the new deduction will be:
[tex]\[
3500 \times 0.11 = \$385
\][/tex]
2. Calculate Total Deductions Before the Change:
- Adding up all the deductions before any changes:
[tex]\[
420 (\text{Federal Income Tax}) + 95 (\text{State Income Tax}) + 89 (\text{Social Security}) + 40 (\text{Medicare}) = \$644
\][/tex]
3. Calculate Total Deductions After the Change:
- With the new federal income tax deduction of \[tex]$385:
\[
385 (\text{Federal Income Tax}) + 95 (\text{State Income Tax}) + 89 (\text{Social Security}) + 40 (\text{Medicare}) = \$[/tex]609
\]
4. Calculate the Net Pay Before and After the Change:
- Net pay before the change:
[tex]\[
3500 (\text{Gross Pay}) - 644 (\text{Total Deductions Before Change}) = \$2856
\][/tex]
- Net pay after the change:
[tex]\[
3500 (\text{Gross Pay}) - 609 (\text{Total Deductions After Change}) = \$2891
\][/tex]
5. Round Net Pay:
- The net pay after the change is already a whole number, so rounding to the nearest dollar results in:
[tex]\[
\$2891
\][/tex]
From the given options, the new monthly net pay of \[tex]$2891 is the correct answer.
Thus, the correct answer is:
\[
\$[/tex]2891
\]
