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by GMATGuruNY » Mon Sep 07, 2015 7:54 am
On July 1 of last year, total employees at company E was decreased by 10%. Without any change in the salaries of the remaining employees, the average employee salary was 10% more after the decrease in the number of employees than before the decrease. The total of the combined salaries of all the employees at Company E after July 1 last year was what percent of that before July 1 of last year?

90
99
100
101
110
Let original number of employees = 10.
Let original average salary = 10.
Original combined salaries = number*average = 10*10 = 100.

Number of employees decreased by 10% = 9.
Average salary increased by 10% = 11.
New combined salaries = number*average = 9*11 = 99.

New combined salaries/Original combined salaries = 99/100 = 99%.

The correct answer is B.
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by Brent@GMATPrepNow » Mon Sep 07, 2015 7:59 am
On July 1 of last year, the total number of employees at Company E was decreased by 10 percent. Without any change in the salaries of the remaining employees, the average employee salary was 10 percent more after the decrease in number of employees than before the decrease. The total of the combined salaries of all the employees at Company E after July 1 last year was what percent of that before July 1 last year?

90%
99%
100%
101%
110%
Choose some nice values that satisfy the given information.

BEFORE July 1
Let's say that there were 10 employees
And let's say the average salary was $10.
TOTAL payroll = (10)($10) =$100

Number of employees decreases by 10%
Average salary increases by 10%
So....

AFTER July 1
There are 9 employees
Average salary is $11.
TOTAL payroll = (9)($11) =$99

The total of the combined salaries of all the employees at Company E after July 1 last year was what percent of that before July 1 last year?

99/100 = [spoiler]99%[/spoiler]

Answer: B
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by [email protected] » Mon Sep 07, 2015 8:35 am
Hi anant03

I'm a big fan of Mitch's solution (to TEST Values). Here's how you can solve with problem with algebra:

N = Number of Employees
S = Average Salary of Employees

Original Formula:

(Sum of Salaries)/N = S

Sum of Salaries = N(S)

On July 1st, the Formula changes:
10% fewer employees
10% increase to average salary

(Sum of Salaries)/(.9N) = 1.1(S)

Sum of Salaries = (.9(N)(1.1)(S)
Sum of Salaries = .99(N)(S)

The original sum of salaries = NS
The new sum of salaries = .99NS

Final Answer: B

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