Jake invested $800 in an RRSP.If he is in the 30 percent marginal tax bracket,he will
A)pay $120 less in taxes.
B)pay $240 less in taxes.
C)receive an $800 tax credit.
D)receive a $400 tax deduction.

Question

Quizplus · Accepted Answer

Since Jake is in the 30% marginal tax bracket, he can reduce his taxable income by the amount he invested in the RRSP (i.e., $800) and save 30% of that amount in taxes. Therefore, he would pay $240 less in taxes.

Jake Invested $800 in an RRSP