Question

Jack is in the 25% tax bracket. If he makes a tax differ deposit of $2500, how much will he save in taxes?

Answer 1

the assumption being that he'll be deferring taxes on $2500 bucks, so is saving is that Da Tax Man is not going to bite him by 25% of that much.

`\begin{array}ll \cline{1-1} \textit{\textit{\LARGE a}\% of \textit{\LARGE b}}\\ \cline{1-1} \\ \left( \cfrac{\textit{\LARGE a}}{100} \right)\cdot \textit{\LARGE b} \\\\ \cline{1-1} \end{array}~\hspace{5em}\stackrel{\textit{25\% of 2500}}{\left( \cfrac{25}{100} \right)2500}\implies \text{\LARGE 625}`