Gmat_mission wrote: ↑

Thu Dec 17, 2020 12:52 pm

In a department of 30 employees, the average salary of top 10 employees was twice the average salary of the remaining employees. If the average salary of top 10 employees is increased by 30% and the average salary of the remaining employees is increased by 10%, then what is the percentage increase in the average salary of all the employees?

A. 10%
B. 15%
C. 20%
D. 25%
E. 40%

Answer: C

Solution:

We can let the top 10 employees’ salaries be $300 each and the remaining 20 employees’ salaries be $150 each. We see that the average salary of all 30 employees is (10 x 300 + 20 x 150)/30 = 6000/30 = $200.

If the salary of the top 10 employees is increased by 30%, then their new salary is 300 x 1.3 = $390. If the salary of the remaining 20 employees is increased by 10%, then their new salary is 150 x 1.1 = $165. Therefore, the new average salary of the 30 employees is (10 x 390 + 20 x 165)/30 = 7200/30 = $240. We see that this is an increase of $40 from the orginal average salary of $200, or an increase of $20 per $100, which is a 20% increase.

Answer: C