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# Dr. Jones lives in a country with a progressive tax system. That is, he does not pay any taxes on the first \$\\$20{,}000\$ in income he makes,

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Dr. Jones lives in a country with a progressive tax system. That is, he does not pay any taxes on the first \$\\$20{,}000\$ in income he makes, he pays \$5\%\$ taxes on the next \$\\$25{,}000\$, he pays \$10\%\$ taxes on the next \$\\$35{,}000\$, he pays \$15\%\$ on the next \$\\$50{,}000\$, and he pays \$20\%\$ on every additional dollar onwards. If Dr. Jones pays \$\\$10{,}000\$ in taxes, then how much income does he make?

Mar 9, 2018

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\$10,000 - \$1,250 - \$3,500 - (0.15*M) =0

\$5,250 - (0.15M) =0           add (0.15M) to both sides

\$5,250 =0.15M                   divide both sides by 0.15

M =\$5,250 / 0.15 = \$35,000 - his last tax bracket. So, his total Income was:

\$35,000 + \$35,000 + \$25,000 + \$20,000(non-taxable amount)

=\$115,000 - Dr. Jones Salary.

Ckeck:

\$115,000 - \$20,000 =\$95,000 Taxable Income

On the first \$25,000 he pays 5% tax =\$1,250

On the next \$35,000 he pays 10% tax =\$3,500

\$95,000 - \$25,000 - \$35,000 =\$35,000 - his last tax bracket.

On this last \$35,000 he pays 15% tax =\$5,250

So, his total taxes =\$1,250+\$3,500+\$5,250 =\$10,000

Mar 9, 2018