What would be the average tax rate for a person who paid taxes of $4,845 on taxable income of $49,820?
Understand the Problem
The question is asking for the average tax rate for an individual who paid $4,845 in taxes on a taxable income of $49,820. To find this, we will calculate the average tax rate as a percentage by dividing the taxes paid by the taxable income and multiplying by 100.
Answer
$9.710\%$
Answer for screen readers
The average tax rate is approximately $9.710%$.
Steps to Solve
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Calculate the Tax Rate To find the average tax rate, use the formula:
$$ \text{Average Tax Rate} = \left( \frac{\text{Taxes Paid}}{\text{Taxable Income}} \right) \times 100 $$
Substituting the provided values:
$$ \text{Average Tax Rate} = \left( \frac{4845}{49820} \right) \times 100 $$ -
Perform the Division Now, divide the taxes paid by the taxable income:
$$ \frac{4845}{49820} \approx 0.0971 $$ -
Convert to Percentage Multiply by 100 to convert to a percentage:
$$ 0.0971 \times 100 \approx 9.710 $$ -
Round to Three Decimal Places Finally, round the result to three decimal places:
$$ \text{Average Tax Rate} \approx 9.710 % $$
The average tax rate is approximately $9.710%$.
More Information
This average tax rate indicates the proportion of income that the individual pays in taxes. A lower average tax rate suggests that they keep a larger percentage of their income.
Tips
- Not converting to a percentage: Forgetting to multiply by 100 after dividing the taxes by taxable income can lead to confusion.
- Incorrect rounding: Ensure to round correctly to three decimal places; rounding too early can distort the final answer.
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