The marginal tax rate is what you pay on your highest dollar of taxable income. The U.S. progressive marginal tax method means one pays more tax as income grows.

To calculate the marginal tax rate on the investment, you'll need to figure out the additional tax on the new income. In this example, $500 will be taxed at 15% and $500 at 25%.

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Written by How to Calculate a Marginal Revenue Derivative for The Motley Fool -> One key decision every business has to make is how much of its goods or services to make available to customers.