A baseball player signs a new contract

[Bullzi]

A baseball player signs a new contract that includes a guaranteed 10 percent increase in salary over his old contract, plus a performance bonus of up to $500. If he earns the maximum possible performance bonus, his new salary including bonus will be equivalent to a 12 percent increase over his old salary. Assuming he earns the full bonus, what will his total new salary be, in dollars?

(A) 24,500
(B) 25,000
(C) 27,500
(D) 28,000
(E) 28,500

OA - D

[Bullzi]

Hello,
So, while this question looks simple, while attempting it, I couldn't somehow make out where I was going wrong. I started out with something like below,

Assuming the initial salary as N, we have,
110N/100 + 500 = 120N/100
Somehow, this doesn't seem to make sense. Please help!

Thanks

[Bullzi]

110N/100 + 500 = 120N/100

Oops, just realized, classic example of what nerves are capable of!
So, the correct equation should be 110N/100 + 500 = 112N/100
Solving for N, we have N = 25000
So, 12% increase would be 28000. Ans - D

Thanks

[Matt@VeritasPrep]

We could also say that 2% of his old salary = 500. From there

.02s = 500

s = 25,000

His old salary is 25,000, and his new salary is

1.1s + 500, or

1.1*25,000 + 500, or

27,500 + 500, or

28,000

[Scott@TargetTestPrep]

A baseball player signs a new contract that includes a guaranteed 10 percent increase in salary over his old contract, plus a performance bonus of up to $500. If he earns the maximum possible performance bonus, his new salary including bonus will be equivalent to a 12 percent increase over his old salary. Assuming he earns the full bonus, what will his total new salary be, in dollars?

(A) 24,500
(B) 25,000
(C) 27,500
(D) 28,000
(E) 28,500

OA - D

We see that the maximum bonus of $500 is equivalent to 12 - 2 = 2 percent of his old salary. Therefore, letting s = his old salary, we can create the equation:

0.02s = 500

s = 500/0.02 = 50,000/2 = 25,000

Since his new salary (including the maximum bonus) is 12 percent more than his old salary, his new salary is 25,000 x 1.12 = $28,000.

Answer: D