Question

Michael needs to pay car insurance premiums of $958 two times per year. He has decided to make deposits from each paycheck to a savings account for “Other Expenses (Predictable)” to cover this expense. How much should Michael deposit from each paycheck if the paycheck is bi-weekly?

Answer 1

Explanation:

Michael needs to pay car insurance premiums of $958 two times per year. Since a year has 52 weeks, this means he needs to pay $958 * 2 = $1916 per year.

Since his paycheck is bi-weekly, he needs to make a deposit of $1916 / 26 = $73.54 from each paycheck to cover the expense.

So Michael should deposit $73.54 from each bi-weekly paycheck to a savings account for "Other Expenses (Predictable)" to cover the car insurance premiums.