a country is considering two income tax rates. geoffrey is comparing what his tax bill would be under each…

a country is considering two income tax rates. geoffrey is comparing what his tax bill would be under each plan. under plan a, he pays 5% on the first $10,000. the next $85,000 is taxed at a rate of 10%. any money earned above $95,000 is taxed at 15%. he made $98,000 last year. which statement below is correct?\n\nplan a tax rates\n|$xleq$10,000|5%|\n|$10,000 < xleq$95,000|10%|\n|$x > $95,000|15%|\n\nplan b tax rates\n|all levels of income|10%|\n\nhe would pay approximately $350 more under plan b.\nhe would pay approximately $1,925 more under plan b.\nhe would pay approximately $5,700 more under plan a.\nhe would pay approximately $4,900 more under plan a.

a country is considering two income tax rates. geoffrey is comparing what his tax bill would be under each plan. under plan a, he pays 5% on the first $10,000. the next $85,000 is taxed at a rate of 10%. any money earned above $95,000 is taxed at 15%. he made $98,000 last year. which statement below is correct?\n\nplan a tax rates\n|$xleq$10,000|5%|\n|$10,000 < xleq$95,000|10%|\n|$x > $95,000|15%|\n\nplan b tax rates\n|all levels of income|10%|\n\nhe would pay approximately $350 more under plan b.\nhe would pay approximately $1,925 more under plan b.\nhe would pay approximately $5,700 more under plan a.\nhe would pay approximately $4,900 more under plan a.

Answer

Explanation:

Step1: Calculate tax under Plan A

For the first $10,000, the tax is $10000\times 0.05=$500$. For the amount from $10001$ to $95000$ ($95000 - 10000=$85000$), the tax is $85000\times0.1=$8500$. For the amount above $95000$ ($98000 - 95000=$3000$), the tax is $3000\times0.15=$450$. The total tax under Plan A is $500 + 8500+450=$9450$.

Step2: Calculate tax under Plan B

The total income is $98000$. The tax under Plan B is $98000\times0.1=$9800$.

Step3: Find the difference

The difference in tax between Plan B and Plan A is $9800 - 9450=$350$. So he would pay approximately $$350$ more under plan B.

Answer:

He would pay approximately $350$ more under plan B.