Romeo earns $4000 per month. He gets a tax-free allowance of $10 000 per year and pays income tax 25% on the rest. How much TAX will he pay in an year?
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Given details are,
Principal (p) = Rs 57600
Rate (r) = 12 ½ % per annum = 25/2×2% = 25/4% = 12.5/2% (half yearly)
Time (t) = 1 ½ years = (3/2) × 2 = 3 half years
By using the formula,
A = P (1 + R/100) n
= 57600 (1 + 12.5/2×100)3
= 57600 (212.5/200)3
= Rs 69089.06
∴ Amount is Rs 69089.06
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