Verify, with calculations, whether Lerato's claim is valid.

Step 1: Show how the amount of R45 000 in tax bracket B was calculated (2.1.1). Tax bracket A covers taxable income from R0 to R250 000, with a tax rate of 18% of taxable income. The R45 000 in tax bracket B represents the tax payable on the maximum income of the preceding bracket (Bracket A). Tax on R250 000 = 18\% × R250 000 Tax on R250 000 = 0.18 × R250 000 Tax on R250 000 = R45 000 Step 2: Determine Sipho's annual gross salary (2.1.2). Sipho's monthly basic salary is R25 220.50. To find the annual gross salary, multiply the monthly salary by 12. Annual Gross Salary = R25 220.50 × 12 Annual Gross Salary = R302 646.00 Step 3: Identify the tax bracket in which Sipho falls (2.1.3). Sipho's annual gross salary is R302 646.00. Referring to TABLE 3: • Bracket A: R0 – R250 000 • Bracket B: R250 001 – R400 000 • Bracket C: R400 001 – R550 000 Since R302 646.00 falls between R250 001 and R400 000, Sipho falls into Tax Bracket B. Step 4: Calculate Sipho's Tax rebates (2.1.4). Sipho is 69 years old, so he qualifies for both the Primary Rebate and the Secondary Rebate. Primary Rebate = R17 235 Secondary Rebate = R9 444 Total Tax Rebates = R17 235 + R9 444 Total Tax Rebates = R26 679 Step 5: Verify Sipho's claim about his final monthly tax payable (2.1.5). First, calculate the annual tax payable before rebates and medical tax credits. Sipho's annual gross salary is R302 646.00, which is in Tax Bracket B. Tax Payable (before rebates) = R45 000 + 26\% of the amount above R250 000 Amount above R250 000 = R302 646 - R250 000 = R52 646 Tax Payable (before rebates) = R45 000 + (0.26 × R52 646) Tax Payable (before rebates) = R45 000 + R13 687.96 Tax Payable (before rebates) = R58 687.96 Next, subtract the total tax rebates. Tax Payable (after rebates) = R58 687.96 - R26 679 Tax Payable (after rebates) = R32 008.96 Next, calculate the annual medical tax credits. Sipho covers himself (main member) and his two children (first dependent and additional member). Monthly Medical Tax Credit = R364 (main member) + R364 (first dependent) + R246 (additional member) Monthly Medical Tax Credit = R974 Annual Medical Tax Credit = R974 × 12 Annual Medical Tax Credit = R11 688 Now, calculate the final annual tax payable. Final Annual Tax Payable = Tax Payable (after rebates) - Annual Medical Tax Credit Final Annual Tax Payable = R32 008.96 - R11 688 Final Annual Tax Payable = R20 320.96 Finally, calculate the final monthly tax payable. Final Monthly Tax Payable = R20 320.9612 Final Monthly Tax Payable = R1 693.41 Sipho claims his final monthly tax payable is above R1 800. Since R1 693.41 is not above R1 800, Sipho's claim is invalid. Step 6: Verify Lerato's claim about the better investment option after 2 years (2.2). Lerato invests R72 000 for 2 years (as per the claim). Option 1: Mandla Bank (Simple Interest) Principal (P) = R72 000 Interest rate (i) = 7.5% p.a. = 0.075 Time (n) = 2 years The formula for simple interest amount is A = P(1 + i · n). A_1 = R72 000 (1 + 0.075 × 2) A_1 = R72 000 (1 + 0.15) A_1 = R72 000 (1.15) A_1 = R82 800 Interest earned = A_1 - P = R82 800 - R72 000 = R10 800 Option 2: Thato Bank (Compound Interest) Principal (P) = R72 000 Interest rate (i) = 8.8% p.a. compounded annually = 0.088 Time (n) = 2 years The formula for compound interest amount is A = P(1 + i)^n. A_2 = R72 000 (1 + 0.088)^2 A_2 = R72 000 (1.088)^2 A_2 = R72 000 (1.183744) A_2 = R85 229.568 Rounding to two decimal places: A_2 = R85 229.57 Interest earned = A_2 - P = R85 229.57 - R72 000 = R13 229.57 Comparing the interest earned after 2 years: Mandla Bank: R10 800 Thato Bank: R13 229.57 Since R13 229.57 > R10 800, Thato Bank earns more interest. Therefore, Lerato's claim that Thato Bank will be the better option because she will earn more interest after 2 years is valid. 3 done, 2 left today. You're making progress.