• Economist Test Prep
    Free Trial & Practice Exam
    BEAT THE GMAT EXCLUSIVE

    Available with Beat the GMAT members only code

    MORE DETAILS
    Economist Test Prep
  • EMPOWERgmat Slider
    1 Hour Free
    BEAT THE GMAT EXCLUSIVE

    Available with Beat the GMAT members only code

    MORE DETAILS
    EMPOWERgmat Slider
  • Magoosh
    Magoosh
    Study with Magoosh GMAT prep

    Available with Beat the GMAT members only code

    MORE DETAILS
    Magoosh
  • The Princeton Review
    FREE GMAT Exam
    Know how you'd score today for $0

    Available with Beat the GMAT members only code

    MORE DETAILS
    The Princeton Review
  • Varsity Tutors
    Award-winning private GMAT tutoring
    Register now and save up to $200

    Available with Beat the GMAT members only code

    MORE DETAILS
    Varsity Tutors
  • e-gmat Exclusive Offer
    Get 300+ Practice Questions
    25 Video lessons and 6 Webinars for FREE

    Available with Beat the GMAT members only code

    MORE DETAILS
    e-gmat Exclusive Offer
  • PrepScholar GMAT
    5 Day FREE Trial
    Study Smarter, Not Harder

    Available with Beat the GMAT members only code

    MORE DETAILS
    PrepScholar GMAT
  • Kaplan Test Prep
    Free Practice Test & Review
    How would you score if you took the GMAT

    Available with Beat the GMAT members only code

    MORE DETAILS
    Kaplan Test Prep
  • Veritas Prep
    Free Veritas GMAT Class
    Experience Lesson 1 Live Free

    Available with Beat the GMAT members only code

    MORE DETAILS
    Veritas Prep
  • Target Test Prep
    5-Day Free Trial
    5-day free, full-access trial TTP Quant

    Available with Beat the GMAT members only code

    MORE DETAILS
    Target Test Prep

When Leo imported a certain item, he paid a 7 percent import

This topic has 2 expert replies and 0 member replies

When Leo imported a certain item, he paid a 7 percent import

Post

Timer

00:00

Your Answer

A

B

C

D

E

Global Stats

Difficult



Source: Official Guide

When Leo imported a certain item, he paid a 7 percent import tax on the portion of the total value of the item in excess of $1,000. If the amount of the import tax that Leo paid was $87.50, what was the total value of the item?

A. $1,600
B. $1,850
C. $2,250
D. $2,400
E. $2,750

The OA is C.

  • +1 Upvote Post
  • Quote
  • Flag

GMAT/MBA Expert

Top Reply
Post
BTGmoderatorLU wrote:
Source: Official Guide

When Leo imported a certain item, he paid a 7 percent import tax on the portion of the total value of the item in excess of $1,000. If the amount of the import tax that Leo paid was $87.50, what was the total value of the item?

A. $1,600
B. $1,850
C. $2,250
D. $2,400
E. $2,750

The OA is C.
Quote:
When Leo imported a certain item, he paid a 7% import tax on the portion of the total value of the item in excess of $1000. If the amount of the import tax that Leo paid was $87.50 what was the total value of the item?
A $1600
B $1850
C $2250
D $2400
E $2750
Here's a step-by-step algebraic solution.

Let T = the TOTAL value of the item.

Leo paid a 7% import tax on the portion of the total value of the item in EXCESS of $1000
So, Leo pays tax on the amount that's GREATER then $1000
So, Leo pays 7% tax on (T - 1000)
We can write: import tax = 7% of (T - 1000)

The amount of the import tax that Leo paid was $87.50
So, we write: $87.50 = 7% of (T - 1000)
Or: $87.50 = 0.07(T - 1000)
Expand to get: 87.50 = 0.07T - 70
Add 70 to both sides to get: 157.5 = 0.07T

NOTE: At this point, you might just plug in the answer choices to see which one makes the above equation true.
Or....
Divide both sides by 0.07 to get: 157.5/0.07 = T
Solve: 2250 = T

Answer: C
Cheers,
Brent

_________________
Brent Hanneson – Creator of GMATPrepNow.com
Use our video course along with Beat The GMAT's free 60-Day Study Guide

Sign up for our free Question of the Day emails
And check out all of our free resources

  • +1 Upvote Post
  • Quote
  • Flag
GMAT Prep Now's comprehensive video course can be used in conjunction with Beat The GMAT’s FREE 60-Day Study Guide and reach your target score in 2 months!
Post
BTGmoderatorLU wrote:
Source: Official Guide

When Leo imported a certain item, he paid a 7 percent import tax on the portion of the total value of the item in excess of $1,000. If the amount of the import tax that Leo paid was $87.50, what was the total value of the item?

A. $1,600
B. $1,850
C. $2,250
D. $2,400
E. $2,750
\[{\text{?}}\,\,{\text{ = }}\,\,{\text{total}}\,\,{\text{value}}\,\, = \,\,\$ \,\,\left( {1000 + {\text{extra}}} \right)\]
\[{\text{87}}{\text{.5}}\,\,{\text{ = }}\,\,\frac{7}{{100}}\left( {{\text{extra}}} \right)\,\,\,\,\,\, \Rightarrow \,\,\,\,\,{\text{extra}}\,\,{\text{ = }}\,\,\frac{{{\text{100}}}}{7} \cdot \frac{1}{{10}}\left( {700 + 140 + 35} \right)\,\,\, = \,\,\,10 \cdot 125\]
\[? = \,1000 + 1250\,\,\,\left[ \$ \right]\]

This solution follows the notations and rationale taught in the GMATH method.

Regards,
Fabio.

_________________
Fabio Skilnik :: www.GMATH.net (Math for the GMAT)
Course release PROMO : finish our test drive till 30/Sep with (at least) 60 correct answers out of 92 (12-questions Mock included) to gain a 70% discount!

  • +1 Upvote Post
  • Quote
  • Flag

Top First Responders*

1 Jay@ManhattanReview 83 first replies
2 Brent@GMATPrepNow 68 first replies
3 fskilnik 55 first replies
4 GMATGuruNY 36 first replies
5 ceilidh.erickson 13 first replies
* Only counts replies to topics started in last 30 days
See More Top Beat The GMAT Members

Most Active Experts

1 image description fskilnik

GMAT Teacher

199 posts
2 image description Brent@GMATPrepNow

GMAT Prep Now Teacher

160 posts
3 image description Scott@TargetTestPrep

Target Test Prep

109 posts
4 image description Jay@ManhattanReview

Manhattan Review

95 posts
5 image description GMATGuruNY

The Princeton Review Teacher

90 posts
See More Top Beat The GMAT Experts