Answer: $7,000
Explanation:
given data:
income yearly = $40,000
tax rate = 10% for first $20,000
25% for next $21,000 - $80,000
solution:
tax payable for first $20,000
this is gotten by multiplyomg the tax rate with the first $20,000 income earned.
= 0.1 * $20,000
= $2,000
tax payable for next 21,000 - $80,000
= 0.25 * $20,000
= $5,000
total tax payable = $2,000 + $5,000
= $7,000
