Before being simplified, the instructions for computing income tax in Country R were to add 2 percent of one's annual income to the average (arithmetic mean) of 100 units of Country R's currency and 1 percent of one's annual income. Which of the following represents the simplified formula for computing the income tax in Country R's currency, for a person in that country whose annual income is I?
A. 50 + I/200
B. 50 + 3I/100
C. 50 + I/40
D. 100 + I/50
E. 100 + 3I/100
Answer: C
Source: GMAT prep test
5-Day Free Trial
5-day free, full-access trial TTP
Available with Beat the GMAT members only code
MORE DETAILS
Before being simplified, the instructions for computing
This topic has expert replies
-
BTGModeratorVI
- Legendary Member
- Posts: 1223
- Joined: Sat Feb 15, 2020 2:23 pm
- Followed by:1 members
Timer
00:00
Your Answer
A
B
C
D
E
Global Stats
GMAT/MBA Expert
-
Brent@GMATPrepNow
- GMAT Instructor
- Posts: 16207
- Joined: Mon Dec 08, 2008 6:26 pm
- Location: Vancouver, BC
- Thanked: 5254 times
- Followed by:1268 members
- GMAT Score:770
2 percent of one’s annual incomeBTGModeratorVI wrote: ↑Fri Jun 05, 2020 11:44 amBefore being simplified, the instructions for computing income tax in Country R were to add 2 percent of one's annual income to the average (arithmetic mean) of 100 units of Country R's currency and 1 percent of one's annual income. Which of the following represents the simplified formula for computing the income tax in Country R's currency, for a person in that country whose annual income is I?
A. 50 + I/200
B. 50 + 3I/100
C. 50 + I/40
D. 100 + I/50
E. 100 + 3I/100
Answer: C
Source: GMAT prep test
If income = i, then 2% of income = (2/100)i = 0.02i
average of 100 units of country R’s currency and 1 percent of one’s annual income
1 percent of one’s annual income = (0.01)i
So, average of 100 units of country R’s currency and 1 percent of one’s annual income = (100 + 0.01i)/2 = 50 + 0.005i
So, TOTAL TAX = 0.02i + (50 + 0.005i)
= 0.025i + 50
= (25/1000)i + 50
= (1/40)i + 50
= i/40 + 50
= C
Cheers,
Brent
Brent Hanneson - Creator of GMATPrepNow.com
GMAT/MBA Expert
-
Scott@TargetTestPrep
- GMAT Instructor
- Posts: 7289
- Joined: Sat Apr 25, 2015 10:56 am
- Location: Los Angeles, CA
- Thanked: 43 times
- Followed by:29 members
Solution:BTGModeratorVI wrote: ↑Fri Jun 05, 2020 11:44 amBefore being simplified, the instructions for computing income tax in Country R were to add 2 percent of one's annual income to the average (arithmetic mean) of 100 units of Country R's currency and 1 percent of one's annual income. Which of the following represents the simplified formula for computing the income tax in Country R's currency, for a person in that country whose annual income is I?
A. 50 + I/200
B. 50 + 3I/100
C. 50 + I/40
D. 100 + I/50
E. 100 + 3I/100
Answer: C
We are given that the instructions for computing income tax in country R were to add 2 percent of one’s annual income to the average (arithmetic mean) of 100 units of country R’s currency and 1 percent of one’s annual income. We need to determine the formula for computing the tax for a person who earns “I” annual income.
The expression is as follows:
0.02I + (100 + 0.01I)/2
2I/100 + (100 + I/100)/2
2I/100 + 100/2 + I/200
2I/100 + 50+ I/200
50 + 4I/200 + I/200
50 + 5I/200
50 + I/40
Answer: C
Scott Woodbury-Stewart
Founder and CEO
[email protected]
See why Target Test Prep is rated 5 out of 5 stars on BEAT the GMAT. Read our reviews
