00:01
The person is currently paying 25 % of a $42 ,000 income.
00:06
We want to know how that compares to paying 15 % of the first $20 ,000, but then going up to 30 % if you go above that $20 ,000.
00:17
First for the 25 % of $42 ,000.
00:20
Take the $42 ,000 and multiply it by 25%, which as a decimal, we just move it two spots over.
00:30
That's 0 .25.
00:34
Multiplying that out, we will get $10 ,500.
00:41
Let's see how much they save by using the second method.
00:45
The first $20 ,000 they are going to have to pay 15 % of.
00:50
So we're going to multiply $20 ,000 by 15%.
00:54
That's $20 ,000 times 0 .15, or $3 ,000...