A tax player is allowed 18 1 8 th of his income tax-free, and pays 20% on the remainder. If he pays ₦490.00 tax, what is his income?

A tax player is allowed $\frac{1}{8}$th of his income tax-free, and pays 20% on the remainder. If he pays ₦490.00 tax, what is his income?

Answer Details

He pays tax on 1 - $\frac{7}{8}$ = $\frac{1}{7}$th of his income
20% is 490, 100% is $\frac{1000}{20}$ x 490, ₦2,450.00
= $\frac{7}{8}$ of his income = ₦2,450.00

$\frac{1}{\frac{7}{8}}$ x 2450
= $\frac{8\times 2450}{7}$
= $\frac{19600}{7}$
= ₦2800.00