A union contract specifies a 6 percent salary

[BTGmoderatorDC]

A union contract specifies a 6 percent salary increase plus a $450 bonus for each employee. For a certain employee, this is equivalent to an 8% salary increase. What was this employee's salary before the new contract?

a) $21500

b) $22500

c) $23500

d) $24300

e) $25000

How will i come up with the correct Option?

OA B

[GMATGuruNY]

A union contract specifies a 6 percent salary increase plus a $450 bonus for each employee. For a certain employee, this is equivalent to an 8% salary increase. What was this employee's salary before the new contract?

a) $21500

b) $22500

c) $23500

d) $24300

e) $25000

Adding a $450 bonus to a 6% increase in salary is the equivalent of an 8% increase in salary.
Implication:
$450 must constitute 2% of the salary, with the result that adding $450 to a 6% increase in salary yields a total increase of 8%.
Since $450 constitutes 2% of the salary, we get:
450 = (2/100)S
450 = (1/50)S
(50)(450) = S
S = 22500.

The correct answer is B.

[Scott@TargetTestPrep]

A union contract specifies a 6 percent salary increase plus a $450 bonus for each employee. For a certain employee, this is equivalent to an 8% salary increase. What was this employee's salary before the new contract?

a) $21500

b) $22500

c) $23500

d) $24300

e) $25000

How will i come up with the correct Option?

OA B

Solution:

We can create the equation:

1.06n + 450 = 1.08n

450 = 0.02n

45,000 = 2n

22,500 = n

Alternate Solution:

The bonus amount of $450 must be equivalent to a 2% pay raise. Letting n = the pre-raise salary, we have

0.02n = 450

n = 22,500

Answer: B