Let’s put the words into equation form:
(Total Income – Exclusion)(Tax Rate) = Income Tax.
The question asks about total income, so we’ll solve the equation for Total Income:
Total Income – Exclusion = [Income Tax / Tax Rate]
Total Income = [Income Tax / Tax Rate] + Exclusion
To maximize total income, we’ll minimize Tax Rate (smaller denominator→larger value) and maximize the Exclusion:
Maximum Total Income = [$8700/0.15] + $9800 = $58,000 + $9,800 = $67,800.
To minimize total income, we’ll maximize Tax Rate (larger denominator→smaller value) and minimize the Exclusion:
Minimum Total Income = [$8700/0.35] + $5200 = $24,857.14 + $5,200 = $30,057.14.
The correct answers are C, D, E, and F.
The letters C, D, E, and F correspond to the values I had selected. MGRE arrived at the exact same range that I had arrived at, too: roughly $30,057 at the bottom end, and $67,800 at the top end.