7) D
We can conclude that Paul turned 50 in 2015 as even though his income increased, his tax decreased.
Let Paul’s income in 2014 be: ‘I’
No tax on the first $9000 of income in 2014.
Tax on the next $25000 = 20% of $25000 = $5000
Tax on the further income = 30% of [T-(9000+25000)]
Total tax = 0.3 x [T-(9000+25000)] + $5000
We know he paid $5600 in 2014. Therefore,
0.3 x [T-(9000+25000)] + $5000 = $5600
0.3 x [T-(9000+25000)] = $600
[T-(9000+25000)] = 600/0.3 = £2000
T – 34000 = 2000
T = 36000
His income in 2014 = 36000
His income in 2015 = 36000 + 2000 = $38000
Hence, D is the answer.
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