Answer to Question #170066 in Financial Math for Benedictus

Question

An employee does not pay tax on the first 4000 dollars of earnings and then 25 % tax the rest . If he wants to have 20000 dollars net of tax earnings what earnings gross earnings does he need.

Answer 1

Let gross earnings = x

net income = tax free income + (0.75(x-4000))

20000= 4000+(0.75x-3000)

20000= 4000+0.75x-3000

0.75x= 19000

X= 25,333.33

Therefore gross earnings is $ 25,333.33