A tax payer is allowed \(\frac{1}{8}\)th of his income tax-free, and pays 20% on the remainder. If he pays N490.00 tax, what is his income?
He pays tax on 1 - \(\frac{1}{8}\) = \(\frac{7}{8}\)th of his income
20% is 490, 100% is \(\frac{100}{20}\) x 490, N2,450.00
= \(\frac{7}{8}\) of his income = N2,450.00
\(\frac{1}{\frac{7}{8}}\) x 2450
= \(\frac{8 \times 2450}{7}\)
= \(\frac{19600}{7}\)
= N2800.00
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