Use the following formula to answer the indicated question: Benefit amount = Maximum award - 0.4 (Wages in excess of ceiling)Renard is retired and earns $10,000 per year working part-time.He is entitled to a maximum Social Security retirement benefit of $12,000.Social Security regulations allow him to earn $7,000 and still get maximum benefits.If he increases the number of hours he works and thus increases his earnings to $20,000,his total income will increase by

Question

Quizplus · Accepted Answer

If Renard increases his earnings to $20,000, his wages in excess of the $7,000 allowed limit would be $13,000 ($20,000 - $7,000). Therefore, using the given formula, his benefit amount would be: $12,000 - 0.4($13,000) = $6,200. The difference between his original benefit amount of $12,000 and his new benefit amount of $6,200 is $5,800, which is an increase in total income of $6,000. Therefore, the correct answer is (A).

Use the Following Formula to Answer the Indicated Question: Benefit