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Hi! I'm Studyfin, your math helper. Today, we will explore how taxes work and learn how to calculate your actual take-home pay!
When you work a job, the money you earn is called your gross pay. However, you do not get to keep all of it because some money is taken out for taxes.
The money taken out of your paycheck is called a tax deduction. We can use a random sample of workers to make inferences about how taxes affect a whole population.
To make an inference, we look at a small random sample. For example, if 8 out of 10 sampled workers pay exactly 15% in taxes, we can infer that about 80% of the entire city pays that same rate.
A random sample of 50 workers in a town shows that 10 of them pay more than 20% of their income in taxes. If the town has 2,000 total workers, how many can we infer pay more than 20% in taxes?
- Find the fraction of workers in the sample who pay more than 20% in taxes. That fraction is 10 out of 50, which simplifies to 1/5.
- Convert this fraction to a decimal or percentage. 1 divided by 5 equals 0.20, which is 20%.
- Multiply this percentage by the total population of the town to make your inference: 2,000 workers multiplied by 0.20.
- Calculate the final value: 2,000 times 0.20 equals 400. We can infer that about 400 workers in the town pay more than 20% in taxes.
