Here is the one with the graph I tried to post earlier. The graph should be showing up now.
Bonus and taxes. A company has an income of $100,000 before paying taxes and a bonus. The bonus B is to be 20% of the income after deducting income taxes T but before deducting the bonus. So B=0.20(100,000-T). Because the bonus is a deductible expense, the amount of income tax T at a 40% rate is 40% of the income after deducting the bonus. So T=0.40(100,000-B).
a)Use the accompanying graph to estimate the values of T and B that satisfy both equations.
b)Solve the system algebraically to find the bonus and the amount of tax.
I started down the path of trying to solve B=0.20(100000-T) and T=0.40(100000-B) as B=20000-0.20T and T=40000-0.40B, then quickly realized this was not correct at all.
Any direction you could provide would be much appreciated. Thank you.