Question

althea is a news reporter with a local station. the news station does not provide disability insurance. she purchases a policy through a local insurance agent who provides a benefit of $3,000 per month. if she is in the 30 percent tax bracket, what will her benefits equal after tax?

Answer 1

Althea's disability insurance policy provides a monthly benefit of $3,000. In the 30% tax bracket, her benefits after tax would be $2,100 per month.

Step-by-step explanation:

Althea, a news reporter, buys a disability insurance policy with a benefit of $3,000 per month. Since she is in the 30 percent tax bracket, her after-tax benefit can be calculated as follows:

Benefit before tax = $3,000 per month

Tax rate = 30%

Taxes due = Benefit before tax × Tax rate

Taxes due = $3,000 × 30% = $900

After-tax benefit = Benefit before tax – Taxes due

After-tax benefit = $3,000 – $900 = $2,100

Therefore, her monthly benefits after tax would equal $2,100.