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? plan a tax rates x ≤ $10,000 5% $10,000 < x ≤ $95,000 10% x > $95,000 15% plan b tax rates all levels of income 10% he would pay approximately $350 more under plan b. he would pay approximately $1,925 more under plan b. he would pay approximately $5,700 more under plan a. he 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? plan a tax rates x ≤ $10,000 5% $10,000 < x ≤ $95,000 10% x > $95,000 15% plan b tax rates all levels of income 10% he would pay approximately $350 more under plan b. he would pay approximately $1,925 more under plan b. he would pay approximately $5,700 more under plan a. he would pay approximately $4,900 more under plan a.

Answer

Explanation:

Step1: Calculate tax under Plan A

For the first $10,000: $10000\times0.05 = 500$. For the amount from $10,001$ to $95,000$ ($95000 - 10000=85000$): $85000\times0.1 = 8500$. For the amount above $95,000$ ($98000 - 95000 = 3000$): $3000\times0.15=450$. Total tax under Plan A is $500 + 8500+450=9450$.

Step2: Calculate tax under Plan B

Total income is $98000$, so tax under Plan B is $98000\times0.1 = 9800$.

Step3: Find the difference

The difference between tax under Plan B and Plan A is $9800 - 9450=350$.

Answer:

He would pay approximately $350 more under plan B.