Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized for You

we will pick new questions that match your level based on your Timer History

Track Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

It appears that you are browsing the GMAT Club forum unregistered!

Signing up is free, quick, and confidential.
Join other 500,000 members and get the full benefits of GMAT Club

Registration gives you:

Tests

Take 11 tests and quizzes from GMAT Club and leading GMAT prep companies such as Manhattan GMAT,
Knewton, and others. All are free for GMAT Club members.

Applicant Stats

View detailed applicant stats such as GPA, GMAT score, work experience, location, application
status, and more

Books/Downloads

Download thousands of study notes,
question collections, GMAT Club’s
Grammar and Math books.
All are free!

Thank you for using the timer!
We noticed you are actually not timing your practice. Click the START button first next time you use the timer.
There are many benefits to timing your practice, including:

Guy's net income equals his gross income minus his [#permalink]

Show Tags

25 Mar 2006, 13:15

1

This post received KUDOS

2

This post was BOOKMARKED

00:00

A

B

C

D

E

Difficulty:

25% (medium)

Question Stats:

71% (01:56) correct
29% (00:59) wrong based on 285 sessions

HideShow timer Statistics

Guy's net income equals his gross income minus his deductions. By what percent did Guy's net income change on January 1, 1989, when both his gross income and his deductions increased?

(1) Guy's gross income increased by 4 percent on January 1, 1989. (2) Guy's deductions increased by 15 percent on January 1, 1989.

Re: Guy's net income equals his gross income minus his [#permalink]

Show Tags

27 Dec 2010, 14:30

7

This post received KUDOS

girindra wrote:

Guy’s net income equals his gross income minus his deductions. By what percent did Guy’s net income change on January 1, 1989, when both his gross income and his deductions increased?

(1) Guy’s gross income increased by 4 percent on January 1, 1989. (2) Guy’s deductions increased by 15 percent on January 1, 1989.

A. Statement (1) ALONE is sufficient, but statement (2) alone is not sufficient. B. Statement (2) ALONE is sufficient, but statement (1) alone is not sufficient. C. BOTH statements TOGETHER are sufficient, but NEITHER statement ALONE is sufficient. D. EACH statement ALONE is sufficient. E. Statements (1) and (2) TOGETHER are NOT sufficient.

I think most people would agree that the answer lies in either E or C, at first glance some would propably pick C. However, C is wrong since we need the ratio between gross income and deductions.

Assume that my gross income is 100 and my deductions is 100 With 1+2) income +4% = 4$ and deductions up 15% = 15$ which equals a net decline

If we change my income to 500 and keep deductions at 100 With 1+2) Income +4% = 20$ and deductions up 15% = 15$ which equals a net increase.

Conclusion, we need to know ratio/fraction of gross income to deductions to find the answer.
_________________

Re: Guy's net income equals his gross income minus his [#permalink]

Show Tags

06 Feb 2011, 12:55

(n2-n1)/n1 is asked. n1=g1-d1 n2=g2-d2 1) g2=1.04g1 Not Suff. as we do not know anything abt d1/d2 2) d2=1.15d1 Not Suff. as we do not know anything abt n1/n2 Cobining, (1.04g1-1.15d1-g1+d1)/(g1-d1)=(0.04g1-0.15d1)/(g1-d1) Still Not Suff. to calculate exact %. So, E

Guy’s net income equals his gross income minus his deductions. By what percent did Guy’s net income change on January 1, 1989, when both his gross income and his deductions increased?

(1) Guy’s gross income increased by 4 percent on January 1, 1989. (2) Guy’s deductions increased by 15 percent on January 1, 1989.

A. Statement (1) ALONE is sufficient, but statement (2) alone is not sufficient. B. Statement (2) ALONE is sufficient, but statement (1) alone is not sufficient. C. BOTH statements TOGETHER are sufficient, but NEITHER statement ALONE is sufficient. D. EACH statement ALONE is sufficient. E. Statements (1) and (2) TOGETHER are NOT sufficient.

I find it helps to write down the given relation:

Net Income = Gross Income - Deductions

Ques: By what % did Net Income increase if both Gross Income and Deductions increase? First up, what comes to mind is that if both Gross Income and Deductions increase by the same percentage, Net Income will increase by the same % too.

Say, both increase by 10%,

New Net Income = (110/100)Gross Income - (110/100)Deductions New Net Income = (110/100)(Gross Income - Deductions) = (110/100) Net Income

But here, even if we consider both statements together, we get New Net Income = (104/100)Gross Income - (115/100)Deductions There is no way we can find how New Net Income is related to Net Income. It will depend on the values of Gross Income and Deductions. (Take Gross Income as 100 and Deductions as 50 in one case and Deductions as 25 in another to see that Net Income changes by a different % in the two cases.)

Re: Guy's net income equals his gross income minus his [#permalink]

Show Tags

13 Jul 2014, 16:09

Hello from the GMAT Club BumpBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
_________________

b]Guy's net income equals his gross income minus his deductions. By what percent did Guy's net income change on January 1, 1989, when both his gross income and his deductions increased?[/b]

Given: Net Income = Gross Income - Deductions.

(1) Guy's gross income increased by 4 percent on January 1, 1989. No info about deductions. Not sufficient. (2) Guy's deductions increased by 15 percent on January 1, 1989. No info about gross income. Not sufficient.

(1)+(2) If Gross Income=100 and Deductions=100, then Guy had decrease in Net Income (since Deductions increased by greater percent than Gross Income) BUT if Gross Income=1,000 and Deductions=100, then Guy had some increase in Net Income. So, we cannot get the percent by which Guy's net income changed on January 1, 1989. Not sufficient.

Happy New Year everyone! Before I get started on this post, and well, restarted on this blog in general, I wanted to mention something. For the past several months...

It’s quickly approaching two years since I last wrote anything on this blog. A lot has happened since then. When I last posted, I had just gotten back from...

Post-MBA I became very intrigued by how senior leaders navigated their career progression. It was also at this time that I realized I learned nothing about this during my...