Question

Due to temporary tax cuts in 2010, a person with typical deductions earning $50,000 per year would have saved 2% of their income plus $850 in federal taxes. How much money did a typical person save?

Answer 1

If the person earns $50,000, we must find how much is 2% of that and then add it to $850. Then we would have how much a typical person saves.

First let's find 2% of $50,000

$\begin{gathered} 2\%\text{ of }50000=\frac{2}{100}\cdot500000=\frac{2\cdot50000}{100}=\frac{100000}{100}=1000 \\ \\ \\ \end{gathered}$

Therefore 2% of $50,000 is $1000. Now we add it to $850 and we get

$1000+850=1850$

The final result is $1850