income tax

grandh01 wrote:After paying a 10 percent tax on all
income over $3,000, a person had a net
income of $12,000. What was the income
before taxes?
(A) $13,300
(B) $13,000
(C) $12,900
(D) $10,000
(E) $9,000

Thanks in advance

Let the income before paying taxes = $x
Then tax = 10% of (x - 3000) = 0.1x - 300
So, Net income = 12000 = x - (0.1x - 300)
Solving the above equation, we get,
0.9x = 11700
x = 13,000

The correct answer is B.

Hi All,

We're told that AFTER paying a 10% tax on all income OVER $3,000, a person had a net income of $12,000. We're asked for the income BEFORE taxes. This question can be solved by TESTing THE ANSWERS.

Since the income after taxes was $12,000, the income BEFORE taxes MUST be greater than $12,000. Among the first 3 answer choices, let's TEST Answer B first...

Answer B: $13,000

IF.... total income was $13,000
10% tax was paid on ($13,000-$3,000) = (.1)($10,000) = $1,000
Thus, income AFTER tax was $13,000 - $1,000 = $12,000
This is an exact match for what we were told, so this MUST be the answer!

Final Answer: B

GMAT assassins aren't born, they're made,
Rich