3
lesson pretestMultiple Choice

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Question 3 • Financial Math

Timothy has a taxable income of $85,000 The tax brackets are 10 percent for up to $20,000 , 15 percent for $20,001 to $50,000 , and 25 percent for income $50,001 and over. How much federal income tax does Timothy owe?

Answer
A
$8,749.75
B
15 dollars comma 250 point 0 0
C
$42,500.00
D
$21,250.00

Explanation

The tax is calculated progressively: 10% of the first $20,000 is $2,000, and 15% of the next $30,000 is $4,500. The remaining $35,000 is taxed at 25%, which is $8,750. Adding these amounts gives $15,250, choice D.

AI-written and checked against the verified answer.

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