Question

Question 10: You earn $50,000 per year and paid 10 percent in taxes this year. The government increased the tax rate to 20 percent for next year. Which amount will you pay in taxes next year?

Option 1: $5,000.
Option 2: $7,500.
Option 3: $8,000.
Option 4: $10,000.

Answer 1

Next year, with a 20 percent tax rate, you will pay $10,000 in taxes on an annual income of $50,000.

Step-by-step explanation:

If you earn $50,000 per year and paid 10 percent in taxes this year, you paid $5,000. However, if the government increases the tax rate to 20 percent for next year, you will be paying 20 percent of your annual earnings in taxes. To calculate the tax amount for the next year, you would multiply your annual earnings by the new tax rate:

$50,000 × 20% = $10,000.

Therefore, with the tax rate increase to 20 percent, you will pay $10,000 in taxes next year.