# Putting It Together: General Problem Solving

Now that you have seen a number of general problem solving techniques and plenty of examples in this module, let’s try to put it all together. In real life, sometimes we have to make big decisions. A major career change or relocation can throw your life into disarray, but perhaps even more importantly, such a change can have lasting effects on your financial future. Suppose you are currently working as a bank teller in your hometown. Your job pays $11 per hour, with 10% taxes taken out of each paycheck. For simplicity, assume you have to work 260 days of the year (you don’t work weekends), 8 hours a day. By carefully budgeting you can keep you monthly expenses to about $1500. But now another job offer has come up. You have the opportunity to become an assistant manager. The only catch is that you’ll have to move to a new branch of the bank opening up in a nearby metropolitan area. So here are the details: The assistant manager salary starts at $32,000. This puts you into the next tax bracket, which means that you will pay $2500 plus 15% of the amount earned over $25,000. Because you are moving to a bigger city, your living expenses will rise as well. After a little research, you determine that your monthly expenses will probably be around $2000.*Should you make the move and take the job offer?*

Answer:
One approach is to calculate the annual **discretionary budget** [the annual net income for each job minus annual expenses] for each position.
**Bank Teller:**

- To calculate the annual discretionary budget, we must find annual
**net income**and the annual expenses. - To find annual expenses, we simply multiple the monthly expenses by 12.
- To determine the annual
**net income**for the bank teller job, we need to find the gross income and subtract the amount of taxes paid. - To find the amount of taxes paid, we need to multiply the gross income by the tax rate (10% = .10).
- To find the annual
**gross income**, we need to determine how many total hours you work in a year. Then we can multiply that by your hourly wage. - To find out how many hours you work in a year, we multiply the number of hours you work each day by the number of days you work per year.

[latex]\displaystyle\frac{8 \; \textrm{hrs.}}{\textrm{day}} \times 260 \;\textrm{days} = 2080 \;\textrm{hrs.}[/latex]

Step 5: Multiply by the hourly wage to determine your annual gross income:[latex]2080 \;\textrm{hrs.}\times \$11 / \textrm{hr.} = \$22,\!880[/latex]

Step 4: Calculate your taxes:[latex]$22,880\times0.10=$2288[/latex]

Step 3: Net income is found by subtracting your taxes from your gross income:[latex]$22,880-$2288=$20,592[/latex] Your annual net income as a bank teller is $20,592.

Step 2: Ok, so now let’s figure out the yearly expenses. If monthly expenses are $1500, then each year you will pay:[latex]12\times$1500=$18,000[/latex]

Step 1: Finally, after the bills are paid, you can do what we want to with the remainder. This is our discretionary budget.[latex]\$20,\!592 - \$18,\!000 = \$2592[/latex]

The annual discretionary budget for the Bank Teller position is $2592. Next, let’s see what kind of discretionary budget you will have if you take the new job.**Assistant Manager:**

- To calculate the annual discretionary budget, we must find annual
**net income**and the annual expenses. - To find annual expenses, we simply multiple the monthly expenses by 12.
- To determine the annual
**net income**for the bank teller job, we need to find the gross income and subtract the amount of taxes paid. - To find the amount of taxes paid for this job, we need to multiply the amount of gross income OVER $25000 (i.e.: $32000-$25000 = $7000) by the tax rate (15% = .15) and add that to $2500.

[latex]$2500+($7000\times0.15)=$3550[/latex]

Step 3: The annual net income for the assistant manager position would be:[latex]$32,000-$3550=$28,450[/latex]

Step 2: It’s a higher net income than you are currently making, but how will it stack up against the higher cost-of-living expenses in the city? Let's find the annual expenses:[latex]12\times$2000=$24,000[/latex]

Step 1: Finally, your new discretionary budget would be:[latex]$28,450-$24,000=$4450[/latex]

That’s definitely an improvement over $2592! Maybe it’s time to move to the big city and start advancing your career. However, since it’s not that much more, you probably shouldn’t go out and buy a brand new car. Just wait until you get your first promotion to full manager.## Licenses & Attributions

### CC licensed content, Original

- Putting It Together: General Problem Solving.
**Authored by:**Lumen Learning.**License:**CC BY: Attribution.

### CC licensed content, Shared previously

- Budget For New Ideas.
**Authored by:**mohamed mahmoud hassan.**License:**CC0: No Rights Reserved.