NECO 2022 · Paper 2 · Q2

Commercial arithmetic

A tax payer is allowed $\frac16$ of his income tax-free and pays 20% on the remainder. If he pays ₦2,400.00 tax, calculate his income and the tax-free amount.

(a)
Enter his income and the tax-free amount (₦).
Separate values with commas, e.g. 3, −2

Worked solution (try it first)

Let his income be ₦ $x$ .
The tax-free part is $\frac16 x$ .
The taxable remainder is $x - \frac16 x = \frac56 x$ .
The tax is 20% of the remainder: $\frac{20}{100} \times \frac56 x = \frac16 x$ .
Set the tax equal to ₦2,400: $\frac16 x = 2400$ .
Multiply both sides by 6: $x = 14\,400$ .
The tax-free amount is $\frac16 \times 14\,400 = 2400$ .
His income is ₦14,400.00 and the tax-free amount is ₦2,400.00.

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