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100 points for $49 worth of Veritas practice GMATs FREE VERITAS PRACTICE GMAT EXAMS Earn 10 Points Per Post Earn 10 Points Per Thanks Earn 10 Points Per Upvote When Leo imported a certain item, he paid a 7 percent import tagged by: BTGmoderatorLU This topic has 2 expert replies and 0 member replies Top Member When Leo imported a certain item, he paid a 7 percent import 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.

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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 Sign up for our free Question of the Day emails And check out all of our free resources 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! GMAT/MBA Expert GMAT Instructor Joined 09 Oct 2010 Posted: 1273 messages Followed by: 29 members Upvotes: 59 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 :: GMATH method creator ( Math for the GMAT)
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