Catherine earns $36,540 p.a. She is taxed in segments as follows: the first $5,000 of income is exempt of tax; income between $5,001 and $25,000 is taxed at 20%; income between $25,001 and $30,000 is taxed at 28%; and income over $30,001 is taxed at 36%. How much tax will she have to pay on her annual wage?
My working out:
20,000 * 0.2 = 4000
5,000 * .28 = 1400
6,540 * .36 = 2354.40
4000+1400+2354.40=7754.40
She has to pay $7754.40 in tax.
But the book says the answer is she has to pay: $5954.40
Where have i gone wrong? I feel stupid cause this seems like a simple question. But there's probably some twist.
My working out:
20,000 * 0.2 = 4000
5,000 * .28 = 1400
6,540 * .36 = 2354.40
4000+1400+2354.40=7754.40
She has to pay $7754.40 in tax.
But the book says the answer is she has to pay: $5954.40
Where have i gone wrong? I feel stupid cause this seems like a simple question. But there's probably some twist.
