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20 January, 11:33

If the first $20,000 of your income (or any portion thereof) is taxed at 10%, and the next $30,000 of your income (or any portion thereof) is taxed at 20%, and any income you make above that is taxed at a 30% rate, then a person who earned an income of $500,000 will pay the following amount in taxes:A. $156,000B. $100,000C. $143,000D. $150,000

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  1. 20 January, 15:15
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    Total tax paid will be $143000

    So option (B) will be correct answer

    Explanation:

    We have given total income = $500000

    It is given that on first $20000 tax rate is 10%

    So tax paid on $20000 = $20000*0.1 = $2000

    And on next $30000 tax rate is 20%

    So tax om $30000 = 0.2*$30000 = $6000

    Now it is given that after that tax is 30%

    So amount left = $500000 - $50000 = $450000

    So tax on this amount = $450000*0.03 = $135000

    So total tax = $135000+$6000+$2000 = $143000

    So option (C) will be the correct answer
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