“You have performed increasingly well this past year and you are earning a 6% pay increase to your current $62,900 annual salary.” Supervisor: “Thanks, I look forward to the additional __ per month.”
The correct answer and explanation is:
Correct Answer:
The additional amount per month is $314.50.
Explanation:
To find the additional monthly income from a 6% pay increase on a current annual salary of $62,900, follow these steps:
- Calculate the total annual raise amount:
6% of $62,900 = 0.06 × 62,900 = $3,774 - Convert the annual raise to a monthly amount:
There are 12 months in a year, so divide the annual raise by 12:
$3,774 ÷ 12 = $314.50
Therefore, the supervisor can look forward to an additional $314.50 per month.
Detailed Explanation (300 words):
When employees receive a percentage-based pay increase, the raise is usually applied to their current annual salary. In this case, the employee earns $62,900 annually and is getting a 6% raise. The first step is to determine how much the 6% increase adds to the yearly salary.
To do this, multiply the current salary by the percentage increase expressed as a decimal: 62,900×0.06=3,77462,900 \times 0.06 = 3,774
This calculation shows that the employee’s annual salary will increase by $3,774.
Since pay is typically discussed on a monthly basis in conversations about budgeting or planning, it’s important to convert this annual raise into a monthly figure. Dividing by 12 (the number of months in a year) gives: 3,774÷12=314.503,774 \div 12 = 314.50
This means that, starting with the raise, the employee’s paycheck will increase by $314.50 each month.
Understanding this monthly increase is helpful for financial planning. It lets both the employee and supervisor anticipate the change in take-home pay and budget accordingly. Monthly breakdowns are often more relatable because bills, rent, groceries, and other expenses are usually monthly.
In summary, a 6% raise on a $62,900 salary results in an additional $3,774 annually or $314.50 monthly. This helps communicate the raise clearly in terms of everyday budgeting and expectations.