Data Interpretation

[gmat740]

Amount charged ==> Percentage Bonus
$ o.o1 to $1000 ==> 0.5
$1000 to $3000 ==> 1
$3000 to $6000 ==> 1.5
$6000 to $10,000 ==> 2

At the end of each year, A credit card company pays a certain bonus to each of its credit card holders on the amount up to $10,000

Percentage of Bonus is as indicated as above.

What is the max annual bonus in $??

a. $100
b. $150
c. $200
d. $250
e. $500


OA after some response

[DanaJ]

Well, say you spend the maximum amount of 10 000.
Then you get:
0.5% for the first 1000 = 0.005*1000 = 5
1% for the next 2000 = 0.01*2000 = 20
1.5% for the next 3000 = 0.015*3000 = 45
2% for the remaining 4000 = 0.02*4000 = 80.

Add everything up to get (5 + 20 + 45 + 80) = 150.

IMHO, this is a case when you use the same system as the progressive tax rate. Please let me know if I'm wrong.

[gmat740]

You are absolutely correct:

The answer is 150

Thanks for the explanation.

I just want to ask that whether questions of progressive taxation are important from GMAT point view ??

[DanaJ]

No, I don't think they are... But you might be faced with smth similar: in this case, it is quite similar to progressive taxation, but, since the GMAT only tests basic concepts and not your knowledge of taxation systems or business, you shouldn't worry.