Let's break down how Geoffrey's taxes would be calculated under each plan, given his income of [tex]$98,000.
Plan A:
1. For the first $[/tex]\[tex]$ 10,000$[/tex] of his income, he pays [tex]$5\%$[/tex] tax:
[tex]\[ 0.05 \times 10,000 = 500 \text{ dollars} \][/tex]
2. For the next \[tex]$85,000 (up to \$[/tex]95,000), he pays [tex]$10\%$[/tex] tax:
[tex]\[ 0.10 \times (95,000 - 10,000) = 0.10 \times 85,000 = 8,500 \text{ dollars} \][/tex]
3. For the remaining amount above \[tex]$95,000, which is \$[/tex]3,000, he pays [tex]$15\%$[/tex] tax:
[tex]\[ 0.15 \times (98,000 - 95,000) = 0.15 \times 3,000 = 450 \text{ dollars} \][/tex]
Adding up the amounts from each segment:
[tex]\[ 500 + 8,500 + 450 = 9,450 \text{ dollars} \][/tex]
So, under Plan A, Geoffrey pays
[tex]\[ 9,450 \text{ dollars} \][/tex]
Plan B:
Under Plan B, Geoffrey pays a flat [tex]$10\%$[/tex] tax on his entire income of [tex]$98,000:
\[ 0.10 \times 98,000 = 9,800 \text{ dollars} \]
So, under Plan B, Geoffrey pays
\[ 9,800 \text{ dollars} \]
Difference:
The difference in tax payment between Plan B and Plan A is:
\[ 9,800 - 9,450 = 350 \text{ dollars} \]
Therefore, the correct statement is:
He would pay approximately \$[/tex]350 more under Plan B.
