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Career and Income: Maren’s Two Paths

Drill 7 ·

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About This Drill

Career and Income: Maren’s Two Paths is a practice drill. It contains 5 original questions created by Brian Stewart, a Barron's test prep author with over 20 years of tutoring experience.

This drill explores a career and income choice that bridges to a household financial decision and uses an invented company and original figures.

Passage

Maren Holcroft is deciding between two ways to earn a living. Path 1 is a salaried job at an established company. Path 2 is starting her own small repair business. Take-home pay is the money left after taxes and deductions, the amount that actually reaches her bank account. Maren's household goal is to cover steady monthly bills of $2,600 while saving to repay the cost of starting the business. The table compares the two paths.

Comparison of Maren's two income paths

FactorPath 1: Salaried jobPath 2: Own business
Monthly take-home pay$3,000$3,600 (typical)
Income stabilitySteady every monthVaries month to month
Growth potentialSmall raises over timeCould grow a lot
Cost to start$0$4,800 in tools and setup

Questions in This Drill

  1. According to the table, what is the typical monthly take-home pay for Path 2, starting her own business?
  2. The money that reaches Maren's bank account after taxes and deductions are removed is best described by which term?
  3. Using the typical figures, how much more take-home pay per month would Path 2 give Maren than Path 1?
  4. If Maren's most important need is making sure she can cover her steady $2,600 in monthly bills without surprises, why might Path 1 suit her better even though it pays less?
  5. Maren chooses Path 2 and wants to repay the $4,800 startup cost from the extra $600 per month that Path 2 brings in over Path 1. About how many months of that extra pay would it take to cover the startup cost?