Functions In Fantasy Island an individual pays 10% tax on gross annual income no

Question

Functions In Fantasy Island an individual pays 10% tax on gross annual income not exceeding $200,000. For every dollar on the next $300,000 the tax is 15%. Any income in excess of this is taxed at 20 cents in the dollar. Using T to represent annual tax liability and x gross annual income:

a. Determine the annual tax liability function T(x) for an income earner in Fantasy Island.

b. What is the tax liability of a person who earns a gross annual income of $350,000?

c. What is the tax liability of a person who earns a gross annual income of $500,000?

Explanation / Answer

a. t(x) = 0.10 X IF x<200,000
   20,000 + 0.15*(X-200000) if 200,000<x<500,000
   20,000 + 45,000 + 0.20*(x-500000) if x>500,000

b. If x =350,000
t(x) = 20000 + 0.15*(350000-200000) = 20000 + 0.15*150000 = $42,500

c. if x = 500,000
t(x) = 20000 + 0.15*(500000-200000) = 20000+0.15*300000 = $65,000

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.