Question

The graph shows the tax rate for differing levels of income.

Angela earns $50,000 a year, and wants to determine the amount of tax she will pay.

Which explanation is correct?

(1 point)

Angela pays a tax rate of 10% on the first $9,275 of income, a tax rate of 15% on the next $28,375 of income, and a tax rate of 25% on the her remaining income.

Angela pays a tax rate of 10% on the first $9,275 of income, a tax rate of 15% on the next $37,650 of income, and a tax rate of 25% on the her remaining income.

Angela pays a tax rate of 15% on $37,650 of income, and a tax rate of 25% on the her remaining income.

Angela pays a tax rate of 25% on her income.

Answer 1

First option.

Reason: 10% applies to the first $9,275; 15% applies to income from $9,276 up to $37,650 (that second chunk is $37,650 − $9,275 = $28,375); the remaining $50,000 − $37,650 = $12,350 is taxed at 25%. (If you want the tax amount: 927.50 + 4,256.25 + 3,087.50 = $8,271.25.)