Problem Solving

Hi All,

We're told that 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 of 100 units of Country R's currency and 1 percent of one's annual income. We're asked 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. This question can be solved by TESTing VALUES.

To start, I'm going to use the variable "J" instead of an "I" (since that might be mistaken for the number 1)...

We're told to add "2% of one's income" to "the average of 100 and 1% of one's income"

Let's TEST J = 100

So we're adding 2% of 100 to (100 + 1% of 100)/2....

2 + 101/2 =
2 + 50.5 =
52.5

So we're looking for an answer that equals 52.5 when J = 100. There's only one answer that matches...

Final Answer: C

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

BTGmoderatorLU wrote: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 + I/200
B. 50 + 3I/100
C. 50+ I/40
D. 100+ I/50
E. 100+ 3I/100

We are given that 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. We need to determine the formula for computing the tax for a person who earns "I" annual income.

The expression is as follows:

0.02I + (100 + 0.01I)/2

2I/100 + (100 + I/100)/2

2I/100 + 100/2 + I/200

2I/100 + 50+ I/200

50 + 4I/200 + I/200

50 + 5I/200

50 + I/40

Answer: C