Question

Manuel made $20,000 in taxable income last year.

Suppose the income tax rate is 10% for the first $7000 plus 16% for the amount over $7000.
How much must Manuel pay in income tax for last year?
$0
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Answer 1

$2780

Explanation:

Given an income tax of 10% of the first $7000 and 16% of all after that, you want the tax on $20,000.

Piece-wise function

Manuel's income is more than $7000, so the tax is computed in two parts.

First $7000

The tax on the first $7000 of income is 10%:

tax = $7000 × 0.10 = $700

Amount Over $7000

The amount over $7000 is ...

$20,000 -7,000 = $13,000

The tax on that amount is 16%:

tax = $13,000 × 0.16 = $2080

Total tax due

The tax Manuel must pay is the total of these two amounts:

$700 +2080 = $2780

Manuel must pay $2780 in income tax for last year.