How much did Amber pay in federal taxes on her investment?

Prepare for the Principles of Investment Exam. Study with flashcards and multiple choice questions, each question has hints and explanations. Get ready for your exam!

To determine how much Amber paid in federal taxes on her investment, it’s essential to consider the tax rate that applies to her investment income and the total amount she earned from her investments. The correct answer of $2,000 suggests that her gains or taxable income were sufficient to lead to this specific tax liability after applying the relevant tax rates.

Assuming Amber's earnings fell within a certain bracket, the calculation of $2,000 as her tax obligation indicates that her investment income likely fell into a range that, when taxed, yielded that amount, accounting for any deductions or allowances applicable to investment income.

Additionally, the other figures provided represent potential tax amounts that do not align with a typical calculation for common tax brackets for investments, based on the specifics of her income situation. If her taxable earnings were higher, it would typically result in a taxation amount that corresponds to $2,000 based on the applied tax rate in her circumstance. Understanding Amber's total investment income and applying the correct tax rate provides clarity on why this value is appropriate.

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