If your tax bill is $200 and your taxable income is $2,000, then your average tax rate is
Blank
______ percent.

Question

If your tax bill is $200 and your taxable income is $2,000, then your average tax rate is 
Blank
______ percent.

BlackTom AI · Accepted Answer

Average tax rate = (tax bill ÷ taxable income) × 100%.

Relevant concepts: the average (or effective) tax rate expresses the portion of taxable income paid in tax, converted to a percentage. This is different from the marginal tax rate, which applies to the last dollar of income.

Step-by-step calculation:
1. Write the formula: Average tax rate = (Tax bill / Taxable income) × 100%.
2. Substitute the given values: Tax bill = $200, Taxable income = $2,000.
3. Compute the ratio: 200 ÷ 2,000 = 0.10.
4. Convert to a percentage: 0.10 × 100% = 10%.

Intermediate steps shown: 200/2000 = 1/10 = 0.10; 0.10 × 100% = 10%.

Why the correct answer is correct: The calculation yields 10%, so on average 10 cents of every dollar earned (of the $2,000) is paid in tax, which is exactly what the average tax rate measures.

Why the other options are incorrect:
- 2% would correspond to a tax bill of 0.02 × $2,000 = $40, not $200.
- 1% would correspond to a tax bill of 0.01 × $2,000 = $20, not $200.
- 20% would correspond to a tax bill of 0.20 × $2,000 = $400, not $200.

Conclusion: The average tax rate is 10%, which matches the provided correct answer (10).

If your tax bill is $200 and your taxable income is $2,000, then your average tax rate is Blank ______ percent.单项选择题

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