Question

Your friend's job pays $10 per hour and he works 40 hours per week. His tax rate is 20 percent. Assuming he works 50 weeks of the year, his yearly gross income is

A. $4,000
B. $16,000
C. $20,000
D. $40,000

Answer 1

The answer is c. $20,000 for gross income.

Answer 2

40 hrs per week for 50 weeks : 40(50) = 2000 hrs
2000 hrs at 10 per hr = (2000)(10) = 20,000.
tax rate is 20% : 0.20(20,000) = 4000
20,000 - 4,000= 16,000 <== gross pay