To determine how much Ethan owes in taxes based on his taxable income of [tex]$87,525, let's carefully apply the given tax schedule step by step.
1. For the first $[/tex]7,825:
[tex]\[
\text{Tax} = 0.10 \times 7,825 = \$782.50
\][/tex]
2. For income between [tex]$7,825 and $[/tex]31,850:
[tex]\[
\text{Tax} = 0.15 \times (31,850 - 7,825) = 0.15 \times 24,025 = \$3,603.75
\][/tex]
Adding the tax from the first bracket:
[tex]\[
\text{Total tax up to $31,850} = \$782.50 + \$3,603.75 = \$4,386.25
\][/tex]
3. For income between [tex]$31,850 and $[/tex]77,100:
[tex]\[
\text{Tax} = 0.25 \times (77,100 - 31,850) = 0.25 \times 45,250 = \$11,312.50
\][/tex]
Adding the tax from the previous brackets:
[tex]\[
\text{Total tax up to $77,100} = \$4,386.25 + \$11,312.50 = \$15,698.75
\][/tex]
4. For income between [tex]$77,100 and $[/tex]160,850:
[tex]\[
\text{Tax} = 0.28 \times (87,525 - 77,100) = 0.28 \times 10,425 = \$2,919.00
\][/tex]
Adding the tax from the previous brackets:
[tex]\[
\text{Total tax up to $87,525} = \$15,698.75 + \$2,919.00 = \$18,617.75
\][/tex]
Therefore, the total amount Ethan owes in taxes is [tex]$18,617.75.
The correct answer is:
B. \$[/tex]18,617.75
