How to calculate problems

Question

Consider a simplified version of the real tax code. Assume that the tax rate on all taxable income is 15% and the standard deduction ($6,350) and personal exemption ($4,050) still apply.

1. If your total income before exemptions was $35,000, what is your taxable income?
2. How much would you have to pay in taxes on this income?
3. What percentage of your total income would you pay in taxes?
4. Write a function to model the total tax paid, T(x), with a total income of x dollars.

Answer 1

Alysa,

First we would have to deduct the personal exemption and the standard deduction from total income:

35000 - 4050 - 6350 = 24600 (This is the taxable income)

Tax at 15% = 0.15 . $24600 = $3690

As a percentage of total income ----> 3690 / 35000 = 0.105 or 10.5%

T(x) = 0.15 (x-4050-6350) - 0.15 (x-10400)

Let me know if you have any questions.