Tax Rate Comparison for Geoffrey

What is a tax rate?

What is the definition of a tax rate?

Which statement is correct for Geoffrey's tax bill comparison?

a. He would pay approximately $350 more under plan b.

b. He would pay approximately $1,925 more under plan b.

c. He would pay approximately $5,700 more under plan a.

d. He would pay approximately $4,900 more under plan a.

Based on the tax rates for each plan, Geoffrey would pay approximately $350 more under plan B.

A tax rate is a set rate at which tax is charged on income.

Amount of tax Geoffrey will pay under Plan A:

$98,000 = $10,000 + $85,000 + $3,000

5% of $10,000 = $500

10% of $85,000 = $8,500

15% of $3,000 = $450

Total tax = $9,450

Amount of tax Geoffrey will pay under Plan B:

10% of $98,000 = $9,800

Difference between Plan B and Plan A = $350

Therefore, Geoffrey would pay approximately $350 more under plan B

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