Sally Is a Single Individual

Sally is a single individual. In 2014, she receives $10,000 of tax-exempt income in addition to her salary and other investment income of $100,000. Sally's 2014 tax return showed the following information: Which of the following statements concerning Sally's tax rates is are) correct? I. Sally's average tax rate is 19.5%. II. Sally's average tax rate is 25.0%. III. Sally's marginal tax rate is 25%. IV. Sally's marginal tax rate is 28%.

A) Statements I and III are correct.
B) Statements I and IV are correct.
C) Statements II and III are correct.
D) Statements II and IV are correct.
E) Only statement IV is correct.