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State X, State Y

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State X, State Y

by GmatKiss » Mon Sep 19, 2011 3:12 am
In State X, the sales tax on electronics is equal to 10 percent of the amount of the purchase price above $100. In State Y, the sales tax on electronics is equal to 8 percent of the entire purchase price. For what purchase price would the sales tax in both states be equal?
(A) $180
(B) $200
(C) $400
(D) $500
(E) $600
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by knight247 » Mon Sep 19, 2011 3:24 am
Let the price at which sales tax in both states are equal be $a

In state x the tax is charged on the amount of the purchase price above $100. So $a has to be greater than 100 and the tax is charged on the difference between a and 100 i.e. a-100.

Tax amount=10(a-100)100=0.1(a-100)

In state y, the tax is charged at the rate of 8% on the entire amount. So tax amount on $a would be 8a/100=0.08a

Equate these two values together i.e.
0.1(x-100)=0.08a
a=500 Hence D
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by cans » Mon Sep 19, 2011 4:03 am
i will go with values....
C) 400. X -> 30 and Y -> 32. nopes
D) 500. X-> 40 and Y -> 40 Correct
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