7) D

We can conclude that Paul turned 50 in 2015 as even though his income increased, his tax decreased.

Let Paul’s income in 2014 be: ‘I’

No tax on the first $9000 of income in 2014.

Tax on the next $25000 = 20% of $25000 = $5000

Tax on the further income = 30% of [T-(9000+25000)]

Total tax = 0.3 x [T-(9000+25000)] + $5000

We know he paid $5600 in 2014. Therefore,

0.3 x [T-(9000+25000)] + $5000 = $5600

0.3 x [T-(9000+25000)] = $600

[T-(9000+25000)] = 600/0.3 = £2000

T – 34000 = 2000

T = 36000

His income in 2014 = 36000

His income in 2015 = 36000 + 2000 = $38000

Hence, D is the answer.

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