Question

10a) Beatrice has an income of

$40 000 in one year.
She pays no tax on the first
$10 000 of her income;
10% tax on the next $10 000 of her income;
25% tax on the rest of her income.

Calculate:
a) the total amount of tax Beatrice pays,

b)the total amount of tax as a percentage of the $40 000.

10b) Beatrice pays a yearly rent of $10 800.
After she has paid her tax, rent and bills, she has $12 000.
Calculate how much Beatrice spends on bills.

Answer 1

a) $6000 tax

b) 15%

c) $11,200 for bills

Explanation:

a)

Beatrice pays 10% on the second $10,000 of her income, which is ...

0.10×$10,000 = $1000

and she pays 25% on the amount over $20,000, which tax is ...

0.25×($40,000 -20,000) = $5000

The total amount of tax Beatrice pays on her $40,000 income is ...

$1000 +5000 = $6000 . . . . tax on $40,000

__

b)

The tax as a percentage of $40,000 is ...

$6,000/$40,000 × 100% = 15% . . . . percentage of income paid in tax

__

c)

The amount left after tax, rent, and bills is ...

$40,000 -tax -rent -bills = $12,000

bills = $28,000 -tax -rent

bills = $28,000 -6,000 -10,800 = $11,200

Beatrice spends $11,200 on bills.