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Jerry’s effective rate is 20%. What is his taxable income in 2022, if he paid $25,000 in taxes in 2022.Group of answer choices$100,000$125,000$625,000$5000

Question

Jerry’s effective rate is 20%. What is his taxable income in 2022, if he paid $25,000 in taxes in 2022.

Group of answer choices
100,000100,000 125,000
625,000625,000 5000

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Solution

The effective tax rate is calculated by dividing the total tax paid by the taxable income. In this case, we know that Jerry's effective tax rate is 20% and he paid $25,000 in taxes.

So, we can set up the equation as follows:

0.20 (Taxable Income) = $25,000

To solve for the taxable income, we divide $25,000 by 0.20:

Taxable Income = 25,000/0.20=25,000 / 0.20 = 125,000

So, Jerry's taxable income in 2022 was $125,000.

This problem has been solved

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