Question

A country is considering two income tax rates. Geoffrey is comparing what his tax bill would be under each plan. Under plan A, he pays 5% on the first $10,000. The next $85,000 is taxed at a rate of 10%. Any money earned above $95,000 is taxed at 15%. He made $98,000 last year. Which statement below is correct?

Answer 1

He would pay approximately $350 more under plan B.
He would pay approximately $1,925 more under plan B.
He would pay approximately $5,700 more under plan A.
He would pay approximately $4,900 more under plan A.