Guy's net income

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bhumika.k.shah: Legendary Member; Posts: 941; Joined: Sun Dec 27, 2009 12:28 amFollowed by: 1 member; Thanked: 20 times

by bhumika.k.shah » Sat Feb 06, 2010 10:45 am

Guy's net income equals his gross income minus his deductions. By what percent did Guy's net income change on January 1, 1989, when both his gross income and his deductions increased?

(1) Guy's gross income increased by 4 percent on
January 1, 1989.
(2) Guy's deductions increased by 15 percent on
January 1, 1989.

What are the things required here to answer the question directly before getting into equations and blah!

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Source: Beat The GMAT — Data Sufficiency | Sat Feb 06, 2010 10:45 am

akahuja143: Master | Next Rank: 500 Posts; Posts: 182; Joined: Mon Apr 20, 2009 7:09 pmFollowed by: 1 member; Thanked: 1 times

by akahuja143 » Sat Feb 06, 2010 10:54 am

my pick would E.

We would need to know his gross income in 1989 or in any of the years and deductions in one of the year..

A . we don't anything about the deduction

B, don't know anything about the income

Together say X id the income in 1989 then next income would be 1.04x
Say Y is the deduction then new deduction would be 1.15Y

Net income in 1989 = X-Y
next year it 1.04x- 1.15y;
change 1.04x -1.15y-(x-Y)

percent would be .04x -0.l15y/ x-y *100 == equation cannot be solved -- hence E

Hope it helps

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bhumika.k.shah: Legendary Member; Posts: 941; Joined: Sun Dec 27, 2009 12:28 amFollowed by: 1 member; Thanked: 20 times

by bhumika.k.shah » Sat Feb 06, 2010 10:56 am

Is there a way by plugging #s???

akahuja143 wrote:my pick would E.

We would need to know his gross income in 1989 or in any of the years and deductions in one of the year..

A . we don't anything about the deduction

B, don't know anyzthing about the income

Together say X id the income in 1989 then next income would be 1.04x
Say Y is the deduction then new deduction would be 1.15Y

Net income in 1989 = X-Y
next year it 1.04x- 1.15y;
change 1.04x -1.15y-(x-Y)

percent would be .04x -0.l15y/ x-y *100 == equation cannot be solved -- hence E

Hope it helps

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ajith: Legendary Member; Posts: 1275; Joined: Thu Sep 21, 2006 11:13 pmFollowed by: 2 members; Location: Arabian Sea; Thanked: 125 times

by ajith » Sat Feb 06, 2010 11:00 am

bhumika.k.shah wrote:
What are the things required here to answer the question directly before getting into equations and blah!

Gross Income - Deductions = Net Income

Say 1000 Dollars is gross income 500 dollars deductions ; net income = 500 dollars

1. Insufficient
2. Insufficient

Both together is also not sufficient since we do not know what the Deductions/Gross Income ratio earlier.

Always borrow money from a pessimist, he doesn't expect to be paid back.

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Gurpinder: Legendary Member; Posts: 659; Joined: Mon Dec 14, 2009 8:12 amFollowed by: 3 members; Thanked: 32 times

by Gurpinder » Mon Aug 08, 2011 12:23 pm

ajith wrote: Both together is also not sufficient since we do not know what the Deductions/Gross Income ratio earlier.

Can someone please explain the above. What ratio is he talking about?

"Do not confuse motion and progress. A rocking horse keeps moving but does not make any progress."
- Alfred A. Montapert, Philosopher.

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ajith: Legendary Member; Posts: 1275; Joined: Thu Sep 21, 2006 11:13 pmFollowed by: 2 members; Location: Arabian Sea; Thanked: 125 times

by ajith » Mon Aug 08, 2011 1:05 pm

Gurpinder wrote:
Can someone please explain the above. What ratio is he talking about?

Consider 2 cases, Gross income was 100 and Net Deductions were 10 (Gross income to Deduction ratio =10)
Gross income was 200 and deductions were 10 ((Gross income to Deduction ratio = 20)

The net income increase in both cases are different even after using (1) and (2)together

Now, if the Gross income to Deduction ratio was constant, using (1) and (2) we could have found out the net income increase in percentage but, it is not indicated in the question, hence E

Always borrow money from a pessimist, he doesn't expect to be paid back.

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navami: Legendary Member; Posts: 540; Joined: Sat Dec 20, 2008 7:24 pmFollowed by: 6 members; Thanked: 37 times

by navami » Tue Aug 09, 2011 5:25 am

E is the answer.

Lets say I have 100 rupees and I give 20 rupees as donation . How much I am left out with ??? ANS : 80

Now lets assume .
100 increases by 10 % and my donation increases by 30% . we can still find out what I am left out with.

Now if we are unaware of figure 100 and donation 20 . will we be able to come to any conclusion?

This time no looking back!!!
Navami

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GmatKiss: Legendary Member; Posts: 2789; Joined: Tue Jul 26, 2011 12:19 amFollowed by: 43 members; Location: Chennai, India; Thanked: 206 times; GMAT Score:640

by GmatKiss » Tue Aug 09, 2011 7:13 am

IMO E

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Gurpinder: Legendary Member; Posts: 659; Joined: Mon Dec 14, 2009 8:12 amFollowed by: 3 members; Thanked: 32 times

by Gurpinder » Tue Aug 09, 2011 8:59 am

ajith wrote:
Gurpinder wrote:
Can someone please explain the above. What ratio is he talking about?
Consider 2 cases, Gross income was 100 and Net Deductions were 10 (Gross income to Deduction ratio =10)
Gross income was 200 and deductions were 10 ((Gross income to Deduction ratio = 20)

The net income increase in both cases are different even after using (1) and (2)together

Now, if the Gross income to Deduction ratio was constant, using (1) and (2) we could have found out the net income increase in percentage but, it is not indicated in the question, hence E

Thank you!

Makes sense.

"Do not confuse motion and progress. A rocking horse keeps moving but does not make any progress."
- Alfred A. Montapert, Philosopher.

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Anaira Mitch: Master | Next Rank: 500 Posts; Posts: 235; Joined: Wed Oct 26, 2016 9:21 pmFollowed by: 5 members; Thanked: 3 times

by Anaira Mitch » Wed Nov 23, 2016 4:38 pm

Guy's net income equals his gross income minus his deductions. By what percent did Guy's net income change on January 1, 1989, when both his gross income and his deductions increased?

Given: Net Income = Gross Income - Deductions.

(1) Guy's gross income increased by 4 percent on January 1, 1989. No info about deductions. Not sufficient.
(2) Guy's deductions increased by 15 percent on January 1, 1989. No info about gross income. Not sufficient.

(1)+(2) If Gross Income=100 and Deductions=100, then Guy had decrease in Net Income (since Deductions increased by greater percent than Gross Income) BUT if Gross Income=1,000 and Deductions=100, then Guy had some increase in Net Income. So, we cannot get the percent by which Guy's net income changed on January 1, 1989. Not sufficient.

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GMAT/MBA Expert

ceilidh.erickson: GMAT Instructor; Posts: 2095; Joined: Tue Dec 04, 2012 3:22 pmFollowed by: 247 members; Thanked: 1443 times

by ceilidh.erickson » Mon Nov 28, 2016 9:23 am

I've posted 3 different solutions to this problem here:
https://www.beatthegmat.com/og2016-q69-t ... tml#770961

Ceilidh Erickson
EdM in Mind, Brain, and Education
Harvard Graduate School of Education

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