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# Last year the first \$ 30,000 of each Country X resident's

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Senior Manager
Joined: 31 Oct 2011
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Last year the first \$ 30,000 of each Country X resident's [#permalink]

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24 Feb 2012, 23:27
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Last year the first \$ 30,000 of each Country X resident's annual taxable income was taxed at the rate of 15 percent, and taxable income in excess of \$ 30,000 was taxed at a rate of 27 percent. If Mr. Smith was a resident last year, was all of his taxable income taxed at the 15 percent rate?

(1) Last year Mr. Smith's tax, based on his taxable income, was \$ 3,750.

(2) If Mr. Smith's taxable income had been twice as much as it was, his tax would have been \$ 9,900.
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Re: PT #8 DS 15 [#permalink]

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25 Feb 2012, 01:00
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Last year the first \$ 30,000 of each Country X resident's annual taxable income was taxed at the rate of 15 percent, and taxable income in excess of \$ 30,000 was taxed at a rate of 27 percent. If Mr. Smith was a resident last year, was all of his taxable income taxed at the 15 percent rate?

Basically the question asks whether Mr. Smith's income was less than or equal to \$30,000. Also notice that for \$30,000 tax is \$30,000*0.13=\$4,500.

(1) Last year Mr. Smith's tax, based on his taxable income, was \$ 3,750. Since the tax was less than \$4,500 then the income was less than \$30,000. Sufficient.

(2) If Mr. Smith's taxable income had been twice as much as it was, his tax would have been \$ 9,900. From \$9,900, \$4,500 was paid on \$30,000 and the rest \$5,400 were paid on an additional income (income over \$30,000) at a rate of 27%. Additional income would be: x*0.27=\$5,400 --> x=\$20,000. So, if Mr. Smith's taxable income had been twice as much it would be \$30,000+\$20,000=\$50,000, so his actual income is \$50,000/2=\$25,000. Sufficient.

Hope it's clear.
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Re: Last year the first \$ 30,000 of each Country X resident's [#permalink]

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29 Mar 2017, 05:47
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Re: Last year the first \$ 30,000 of each Country X resident's   [#permalink] 29 Mar 2017, 05:47
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# Last year the first \$ 30,000 of each Country X resident's

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