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Mr. johnson earns $100,000 per year. each year he spends $70,000 and saves $30,000. he pays a 5 percent sales tax on all of his spending. assuming this is the only tax he pays, his average tax rate out of his income is

Answer :

Brian56537
$3500
Take 70000, and only 70000 because this is the only thing being taxed. Multiply it by 5% or 0.05 and you will recieve, or in this case, be taken away, $3500.

Average tax rate out of Mr. Johnsons earning is equals to $3500.

What is tax rate?

" Tax rate is the process of finding the percentage of amount of earnings to be taxed."

According to the question,

Given,

Total money earned by Mr. Johnson per year = $100,000

Every year amount he spend = $70,000

Every year amount he saved = $30,000

Percentage of sales tax on his spending paid by Mr. Johnson = 5%

Average tax rate = 70,000 × ( 5 / 100)

                           = $3,500

Hence, average tax rate out of Mr. Johnsons earning is equals to $3500.

Learn more about tax rate here

https://brainly.com/question/24734294

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