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JAMB Mathematics 1988 Question 7

Question 7

Commercial Arithmetic

A tax payer is allowed 1/8th of his income tax-free and pays 20% on the remainder. If he pays N490.00 tax, what is his income?

  1. A.N560.00
  2. B.N2,450.00
  3. C.N2,800.00
  4. D.N3,920.00
Show the answer and explanation

Answer: C (N2,800.00)

Explanation

20% of the taxable part is N490, so the taxable part is N2,450. That is 7/8 of his income, so the income is 2,450 × 8/7 = N2,800.