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Because he’s taxed by his home planet, Mork pays a tax rat

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Because he’s taxed by his home planet, Mork pays a tax rat

by M7MBA » Sat Nov 30, 2019 4:34 am
Because he's taxed by his home planet, Mork pays a tax rate of 40% on his income, while Mindy pays a rate of only 30% on hers. If Mindy earned 3 times as much as Mork did, what was their combined tax rate?

(A) 32.5%
(B) 34%
(C) 35%
(D) 36%
(E) 37.5%

[spoiler]OA=A[/spoiler]

Source: Veritas Prep
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by Jay@ManhattanReview » Mon Dec 02, 2019 9:07 pm
M7MBA wrote:Because he's taxed by his home planet, Mork pays a tax rate of 40% on his income, while Mindy pays a rate of only 30% on hers. If Mindy earned 3 times as much as Mork did, what was their combined tax rate?

(A) 32.5%
(B) 34%
(C) 35%
(D) 36%
(E) 37.5%

[spoiler]OA=A[/spoiler]

Source: Veritas Prep
Say Mork earns $x and Mindy earns $3x. Thus, their combined tax rate = (40x + 30*3x)/(x + 3x) = 130/4 = 32.5%

The correct answer: A

Hope this helps!

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by Scott@TargetTestPrep » Thu Dec 05, 2019 7:04 pm
M7MBA wrote:Because he's taxed by his home planet, Mork pays a tax rate of 40% on his income, while Mindy pays a rate of only 30% on hers. If Mindy earned 3 times as much as Mork did, what was their combined tax rate?

(A) 32.5%
(B) 34%
(C) 35%
(D) 36%
(E) 37.5%

[spoiler]OA=A[/spoiler]

Source: Veritas Prep
We can create the following equation:

(0.4 x n + 0.3 x 3n)/4n = (0.4n + 0.9n)/4n = 1.3n/4n = 0.325 = 32.5%

Alternate Solution:

Let's assume that Mork earns $100, and thus Mindy earns $300.

Mork pays 100 x 0.4 = $40 in taxes.

Mindy pays 300 x 0.3 = $90 in taxes.

Thus their combined tax rate is (40 + 90)/(100 + 300) = 130/400 = 0.325 = 32.5%.

Answer: A

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