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?
1. 50 + I/200
2. 50 + 3I/100
3. 50 + I/40
4. 100 + I/50
5. 100 + 3I/100
Above question is from GMAT Prep. Please help in answering...!!
Income Tax
This topic has expert replies
- GMATinsight
- Legendary Member
- Posts: 1100
- Joined: Sat May 10, 2014 11:34 pm
- Location: New Delhi, India
- Thanked: 205 times
- Followed by:24 members
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 incomeDevB wrote: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?
1. 50 + I/200
2. 50 + 3I/100
3. 50 + I/40
4. 100 + I/50
5. 100 + 3I/100
Above question is from GMAT Prep. Please help in answering...!!
Let, Income = I
2% of annual Income = (2/100)I
Average of 100 Units of R's Currency and 1% of annual income = [100 + (1/100)I]/2
Following the instruction above:
To calculate the Tax "The required Addition" = (2/100)I + [100 + (1/100)I]/2
Income Tax = I/50 + (50 + I/200)
Income Tax = I/40 + 50
Answer: Option C
"GMATinsight"Bhoopendra Singh & Sushma Jha
Most Comprehensive and Affordable Video Course 2000+ CONCEPT Videos and Video Solutions
Whatsapp/Mobile: +91-9999687183 l [email protected]
Contact for One-on-One FREE ONLINE DEMO Class Call/e-mail
Most Efficient and affordable One-On-One Private tutoring fee - US$40-50 per hour
Most Comprehensive and Affordable Video Course 2000+ CONCEPT Videos and Video Solutions
Whatsapp/Mobile: +91-9999687183 l [email protected]
Contact for One-on-One FREE ONLINE DEMO Class Call/e-mail
Most Efficient and affordable One-On-One Private tutoring fee - US$40-50 per hour
-
- Master | Next Rank: 500 Posts
- Posts: 379
- Joined: Tue Sep 30, 2008 7:17 am
- Location: NY
- Thanked: 28 times
- Followed by:11 members
Assume I = 100 .... (as numbers given in percentage )
2 % of I = 2
Mean = (100+1)/2= 50.5
ACCORDING TO QUESTION
2+ 50.5 = 52.5
Check now ....
(a) 50+ (I/200)= 50 +(100/200)= 50+.5= 50.5 . This is not equal to 52.5 RULE OUT CHOICES WHICH IS NOT EQUAL TO 52.5
Only (c) equals 52.5 . Hence answer C
2 % of I = 2
Mean = (100+1)/2= 50.5
ACCORDING TO QUESTION
2+ 50.5 = 52.5
Check now ....
(a) 50+ (I/200)= 50 +(100/200)= 50+.5= 50.5 . This is not equal to 52.5 RULE OUT CHOICES WHICH IS NOT EQUAL TO 52.5
Only (c) equals 52.5 . Hence answer C
- GMATGuruNY
- GMAT Instructor
- Posts: 15539
- Joined: Tue May 25, 2010 12:04 pm
- Location: New York, NY
- Thanked: 13060 times
- Followed by:1906 members
- GMAT Score:790
Let I = 200 units of currency.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
The tax is the SUM of two values: 2% of the income AND the average of 100 units of currency and 1% of the income.
2% of the income = .02(200) = 4.
The average of 100 units of currency and 1% of the income = (100 + .01(200)) / 2 = 102/2 = 51.
Tax = 4+51 = 55. This is our target.
Now plug I=200 into the answers to see which yield our target of 55.
Only answer choice C works:
50 + I/40 = 50 + 200/40 = 55.
The correct answer is C.
Private tutor exclusively for the GMAT and GRE, with over 20 years of experience.
Followed here and elsewhere by over 1900 test-takers.
I have worked with students based in the US, Australia, Taiwan, China, Tajikistan, Kuwait, Saudi Arabia -- a long list of countries.
My students have been admitted to HBS, CBS, Tuck, Yale, Stern, Fuqua -- a long list of top programs.
As a tutor, I don't simply teach you how I would approach problems.
I unlock the best way for YOU to solve problems.
For more information, please email me (Mitch Hunt) at [email protected].
Student Review #1
Student Review #2
Student Review #3
Followed here and elsewhere by over 1900 test-takers.
I have worked with students based in the US, Australia, Taiwan, China, Tajikistan, Kuwait, Saudi Arabia -- a long list of countries.
My students have been admitted to HBS, CBS, Tuck, Yale, Stern, Fuqua -- a long list of top programs.
As a tutor, I don't simply teach you how I would approach problems.
I unlock the best way for YOU to solve problems.
For more information, please email me (Mitch Hunt) at [email protected].
Student Review #1
Student Review #2
Student Review #3