Diana invests $25000, at the end of the year she will receive 7% interest, but will have to pay 16% tax on the interest received. The question r in description

Question

How much interest will Diana earn after she pays the tax? I don't understand how you would do the problem. My teacher explained it to me by explaining that you would find out how much 7% is and how much 16% is, but what would you subtract? What percent of Diana's investment is interest after paying the tax?

Answer 1

7% *$25,000

0.07*$25,000=$1750 interest received

16%*$1750

0.16*$1750=$280 tax paid

Diana receives a net amount of $1750-$280=$1470 in interest

1470/25,000=147/2500=0.0588=5.88%, or...

1470/25,000=147/2500=?

divide both numerator and denominator by 25

147/25=5.88

2500/25=100

147/2500=5.88/100=5.88% again