Question

You purchase a 6 percent $10,000 bond for $9,180 plus $156 in accrued interest for a total outlay of $9,336. Subsequently, you receive a $300 interest payment. You are in the 20 percent income tax bracket. How much tax do you owe on the interest payment?

A) $12.00
B) $24.00
C) $30.00
D) $60.00

Answer 1

The tax owed on a $300 bond interest payment for someone in the 20 percent income tax bracket is $60.

Step-by-step explanation:

If you receive a $300 interest payment on a bond and are in the 20 percent income tax bracket, the amount of tax you owe is calculated by multiplying the interest received by the tax rate. In this case, $300 × 20% = $60. Therefore, the amount of tax owed on the interest payment is $60.