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.

GMATGuruNY wrote:

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.

In general, if it is a % question, we take 100. But here you have made your calculation taking 10 as original employees. By taking 100, I am also getting answer as 110.
What is the reason for taking 10 instead of 100?

nimish wrote:

GMATGuruNY wrote:

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.

In general, if it is a % question, we take 100. But here you have made your calculation taking 10 as original employees. By taking 100, I am also getting answer as 110.
What is the reason for taking 10 instead of 100?

I chose 10 for the number of employees and 10 for the average salary so that the combined salaries would be 100.
The answer is the same regardless of the number of employees:

Let original number of employees = 100.
Let original average salary = 10.
Original combined salaries = number*average = 100*10 = 1000.

Number of employees decreased by 10% = 90.
Average salary increased by 10% = 11.
New combined salaries = number*average = 90*11 = 990.

New combined salaries/Original combined salaries = 990/1000 = 99%.

With 100 employees, the correct answer remains B.

Thanks GMATGuruNY! I guess this is a typical GMAT question. 'The average salary' are the key words. Its simple math with trippy language. Very typical and tiring.


[quote="GMATGuruNY"][quote="nimish"][quote="GMATGuruNY"][quote]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[/quote]

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 [spoiler]B[/spoiler].[/quote]

In general, if it is a % question, we take 100. But here you have made your calculation taking 10 as original employees. By taking 100, I am also getting answer as 110.
What is the reason for taking 10 instead of 100?[/quote]

I chose 10 for the number of employees and 10 for the average salary so that the combined salaries would be 100.
The answer is the same regardless of the number of employees:

Let original number of employees = 100.
Let original average salary = 10.
Original combined salaries = number*average = 100*10 = 1000.

Number of employees decreased by 10% = 90.
Average salary increased by 10% = 11.
New combined salaries = number*average = 90*11 = 990.

New combined salaries/Original combined salaries = 990/1000 = 99%.

With 100 employees, the correct answer remains [spoiler]B[/spoiler].[/quote]