SOLUTION: Hi there, I had tried to solve this word problems...can't figure it out!! Everytime, I come up with a different answer. Any help would be greatly appreciated. Thanks. " At th

Question 334074: Hi there,
I had tried to solve this word problems...can't figure it out!!
Everytime, I come up with a different answer. Any help would be greatly appreciated.
Thanks.
" At the end of the year, a business has made a profit of $154,000. They must calculate the amount of tax due to the federal government and to the state. The federal tax rate is 30%, and the state tax rate is 10%. State taxes (ST) are deductible before federal taxes (FT) are calculated, and federal tax are deductible before states taxes are calculated. In other words, state taxes are subtracted from the profits before the 30% federal tax is calculated, and federal taxes are subtracted from the profits before the 10% state tax is calculated. 10% or 30 % of 154,000 does not require a system of equations to solve. Create and solve a system of equations to figure out how much state and federal taxes are owed by this company.

1. Identify the variables first. Do not confuse the tax rate with the amount of tax.
2. Set up a system of two equations. This is the only way that this problem can be solved.
3. Solve the system. Remember to report the answer in dollars."

Answer by mananth(16946) (Show Source): You can put this solution on YOUR website!
Profit = $154,000
..
Federal Tax = 30 %
..
State Tax = 10%
..
Federal Tax = (154,000- 0.1*(154000))*0.3
= $ 41580. 00
..
State Tax=(154,000-0.3*154000))*0.1
= $10,780. 00
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