## Before being simplified, the instructions for computing income tax in Country $$R$$ were to add $$2$$ percent of one's

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### Before being simplified, the instructions for computing income tax in Country $$R$$ were to add $$2$$ percent of one's

by VJesus12 » Thu Jul 22, 2021 3:33 am

00:00

A

B

C

D

E

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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. $$50 + \dfrac{I}{200}$$

B. $$50 + \dfrac{3I}{100}$$

C. $$50 + \dfrac{I}{40}$$

D. $$100 + \dfrac{I}{50}$$

E. $$100 + \dfrac{3I}{100}$$

Source: GMAT Prep

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### Re: Before being simplified, the instructions for computing income tax in Country $$R$$ were to add $$2$$ percent of one

by [email protected] » Thu Jul 22, 2021 5:13 am
VJesus12 wrote:
Thu Jul 22, 2021 3:33 am
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. $$50 + \dfrac{I}{200}$$

B. $$50 + \dfrac{3I}{100}$$

C. $$50 + \dfrac{I}{40}$$

D. $$100 + \dfrac{I}{50}$$

E. $$100 + \dfrac{3I}{100}$$

Source: GMAT Prep
2 percent of one’s annual income
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

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Brent
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### Re: Before being simplified, the instructions for computing income tax in Country $$R$$ were to add $$2$$ percent of one

by swerve » Thu Jul 22, 2021 11:21 am
VJesus12 wrote:
Thu Jul 22, 2021 3:33 am
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. $$50 + \dfrac{I}{200}$$

B. $$50 + \dfrac{3I}{100}$$

C. $$50 + \dfrac{I}{40}$$

D. $$100 + \dfrac{I}{50}$$

E. $$100 + \dfrac{3I}{100}$$

Source: GMAT Prep
Annual Income = i
$$2\%$$ of annual income $$= 0.02i$$
Average of $$100 R$$ and $$1\%$$ of annual income $$= \dfrac{100+0.01i}{2}$$

$$\dfrac{100+0.01i}{2} + 0.02i$$
$$(50+0.005i) + 0.02i$$
$$50 + 0.025i$$
$$50 + \dfrac{25i}{1000}$$
$$50 + \dfrac{5i}{200}$$
$$50 + \dfrac{i}{40}$$

Therefore, C

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