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Manager
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After paying a 10 percent tax on all income over $3,000, a [#permalink] ### Show Tags 11 Mar 2008, 15:20 00:00 Difficulty: (N/A) Question Stats: 0% (00:00) correct 0% (00:00) wrong based on 0 sessions ### HideShow timer Statistics This topic is locked. If you want to discuss this question please re-post it in the respective forum. After paying a 10 percent tax on all income over$3,000, a person had a net income of $12,000. What was the income before taxes? (A)$13,300
(B) $13,000 (C)$12,900
(D) $10,000 (E)$9,000
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11 Mar 2008, 15:49
After paying a 10 percent tax on all income over $3,000, a person had a net income of$12,000. What was the income before taxes?

Suppose person income is 3000 + X.
On 3000 he does pay any tax.
On X is pays 10 percent tax, X*10/100 = 0.1X
Remaining Amount = X - 0.1X = 0.9X

Net Income = 3000 + 0.9X = 12000
=> X = 10000

So total income before tax = 3000 + 10000 = 13000

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11 Mar 2008, 16:39
whered i go wrong here:

net = gross - taxed amount, x=gross amount

12,000=x-(x-3000)(0.1)
9000 = 0.9*gross

gross = 10,000

i know that answer is wrong because he cant have a net amount greater than his gross, but what am i doing wrong in my initial equation ?
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11 Mar 2008, 16:55
pmenon wrote:
whered i go wrong here:

net = gross - taxed amount, x=gross amount

12,000=x-(x-3000)(0.1)
9000 = 0.9*gross

gross = 10,000

i know that answer is wrong because he cant have a net amount greater than his gross, but what am i doing wrong in my initial equation ?

I did the exact same thing but I forgot to add the 10,000 + 3000 that wasn't taxable. very tricky.
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11 Mar 2008, 19:44
el1981 wrote:
After paying a 10 percent tax on all income over $3,000, a person had a net income of$12,000. What was the income before taxes?
(A) $13,300 (B)$13,000
(C) $12,900 (D)$10,000