income tax computation

[RB_51273]

Before being simplified,the instructions for computing income tax in country R were to add 2% of one's annual income to the average of 100 units of country R's currency and 1% of one's annual income.Which of the following represent Income tax in country R's currency for a person in that country whose annual income is I

a) 50+I/200
b)50+3I/100
c)50+I/40
d)100+I/50
e)100+3I/100

This is from GMAT prep softwere
Answer provided is C.

Unable to solve,Please provide the full solution


Ram

[aravindc78]

Before being simplified,the instructions for computing income tax in country R were to add 2% of one's annual income to the average of 100 units of country R's currency and 1% of one's annual income.Which of the following represent Income tax in country R's currency for a person in that country whose annual income is I

a) 50+I/200
b)50+3I/100
c)50+I/40
d)100+I/50
e)100+3I/100

This is from GMAT prep softwere
Answer provided is C.

Unable to solve,Please provide the full solution
Ram

Assume Rupee is the currency unit and 10, 000 rupees is the annual income.

The average of 100 units of country's currency and 1% of 10,000 (annual income) would be 200/2 = 100. Adding 2% of annual income (0.02*10,000=200) to this would give the total tax amount of 300.

Now plug this in the equations (Annual income I = 10,000). You will see that the equation that fits this would be 300.

So the idea is to choose the numbers and then look for the correct answer.

[RB_51273]

Thanks a lot,
Actually I could not understand the stem of question

Ram

[esledge]

Hi Ram,

Sounds like you are having trouble translating the words into equations. Let's break it into pieces:

"2% of one's annual income" = (0.02)(Income)

"the average of 100 units of country R's currency and 1% of one's annual income" = [100 + (0.01)(Income)]/2

Instructions for computing tax are thus "add (0.02)(Income) to [100 + (0.01)(Income)]/2".

For a person whose Income is I, Tax = 0.02I + 50 + 0.005I = 50 + 0.025I = 50 + (25/1000)I = 50 + (1/40)I = 50 + I/40

[RB_51273]

Thanks Emily

Yup getting problem in translating the word problem


thanks

ram

[RonPurewal]

guys, do not post GMATPREP problems in this folder. post them in the dedicated GMATPREP folder.

thank you.

there are a couple of threads about this problem already. here is one of them:
post11728.html