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24 Oct 2017, 00:30
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A person who has an income of $10,000 pays what percent (to the nearest percent) of his or her income in taxes? (A) 1 (B) 2 (C) 3 (D) 4 (E) 5 [Reveal] Spoiler: OA _________________ Kudos [?]: 135364 [0], given: 12691 Manager Joined: 05 Dec 2016 Posts: 248 Kudos [?]: 26 [0], given: 49 Concentration: Strategy, Finance GMAT 1: 620 Q46 V29 Re: A person who has an income of$10,000 pays what percent (to the neares [#permalink]

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24 Oct 2017, 03:10
I'll try:
140+4% of 2000 (income above 8k)=140+80=220
220/10000=0,022=2,2%~2%

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25 Oct 2017, 07:13
Bunuel wrote:

A person who has an income of $10,000 pays what percent (to the nearest percent) of his or her income in taxes? (A) 1 (B) 2 (C) 3 (D) 4 (E) 5 Whichever tax bracket you choose for the$10,000, the amount she pays is $220. That amount is 2.2 percent of her income. Answer B She has to pay only once. (Otherwise, someone who makes$11,000 pays less than she. That defies the logic of the progressive tax bracket data.)

$10,000 happens to be the end and beginning of two brackets. It doesn't matter. Both brackets yield identical taxes owed. 1) Lower bracket (range) amount In the$8,000-10000 bracket, a person who earns $10,000 pays: a) a flat$140 plus
b) 4% of income over 8,000

(10,000-8,000) = $2,000 excess income ($2,000 * .04) = $80 excess tax Flat$140 tax + $80 excess tax = Total taxes paid:$220

2) Higher bracket tax amount

If (10,000 - 15,000), taxes paid:
a) a flat $220 plus b) 5 percent of income > 10,000 There is no income over 10,000. Total taxes paid:$220

$220 is what percent of her$10,000 income?

Percent of income:

$$(\frac{220}{10000} * 100)$$ = (.022 * 100) =

2.2 percent, round down to 2%

* Here, a "bracket" specifies a range of income. If you fall in that range, you pay whatever amount the bracket says. Usually a bracket such as this one would say: "8000-9999, [pay $140 plus. . ."] The next bracket would step up to "10000 - 12000, [pay$180 + . . ."] It doesn't matter here. The amounts are the same.

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25 Oct 2017, 08:49
It's already mentioned in 5th row entry that the base tax for $10,000 is 220. So 220 is what percent of$10,000? 2.2
=> 2% to nearest percent.
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Last edited by TaN1213 on 25 Oct 2017, 21:27, edited 1 time in total.

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Re: A person who has an income of $10,000 pays what percent (to the neares [#permalink] ### Show Tags 25 Oct 2017, 10:36 Bunuel wrote: A person who has an income of$10,000 pays what percent (to the nearest percent) of his or her income in taxes?

(A) 1
(B) 2
(C) 3
(D) 4
(E) 5

For income up to 4000 = 40
For income 4000 - 6000 = 40 + 2% of 6000

So, Total Tax is = 40 + 40 + 1200

Thus, Tax will be 2000

Hence, Percentage of income Tax paid is 2% , answer will be (B)
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Re: A person who has an income of $10,000 pays what percent (to the neares [#permalink] ### Show Tags 26 Oct 2017, 14:47 Bunuel wrote: A person who has an income of$10,000 pays what percent (to the nearest percent) of his or her income in taxes?

(A) 1
(B) 2
(C) 3
(D) 4
(E) 5

For a person who earns $10,000, he or she pays 220 + 0.05(10,000 - 10,000) =$220. Thus, his or her actual tax rate is 220/10,000 = 0.022 = 2.2% ≈ 2%.

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