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Guy's net income equals his gross income minus his deduction

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Guy's net income equals his gross income minus his deduction [#permalink] New post 01 Oct 2012, 04:25
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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.

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Re: Guy's net income equals his gross income minus his deduction [#permalink] New post 01 Oct 2012, 05:45
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N.Income = G.Income - Deductions

lets say ni= gi -d

from 1 gi => 1.04 gi doesnot take abt Deductions so not sufficient

from 2 d => 1.15 d doesnot take abt Gross income so not sufficient

from 1 and 2

new net income = 1.04 gi - 1.15 d

Using thsi we still cant find the % change in Net income so E
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Re: Guy's net income equals his gross income minus his deduction [#permalink] New post 01 Oct 2012, 04:26
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SOLUTION

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?

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.

Answer: E.
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Re: Guy's net income equals his gross income minus his deduction [#permalink] New post 04 Oct 2012, 16:27
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I like those kind of questions because are almost pure logic without to stay too much thinking about numbers.

NI = net income

GI = gross income

Ded= deduction

NI = GI - Ded

1) we have only GI

2) we have only Ded

Both are insuff

Now is the most abstract part that you have to understand very carefully: if GI increase by 4% and Ded by 15% if we do not have a clear anchor point: GI even with a small variation could be larger than Ded so we could have a NI BUT if we have the reverse situation we would not have NI because the Ded could be larger than GI and the latter would disappear without to establish with security NI

E is the answer
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Re: Guy's net income equals his gross income minus his deduction [#permalink] New post 01 Oct 2012, 19:04
1) No info about Deduction - Insufficient
2) No info about Gross income - Insufficient
1+2) New Income = 1.04 G + 1.15 D
New Income will vary for different relative values of Gross Income & Deductions - Insufficient

Answer E
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Re: Guy's net income equals his gross income minus his deduction [#permalink] New post 04 Oct 2012, 14:09
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SOLUTION

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?

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.

Answer: E.

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Re: Guy's net income equals his gross income minus his deduction [#permalink] New post 05 Jun 2013, 10:44
I have a question:

If the problem provided with a Gross and Deduction ratio, then the correct answer would have been be C?

Since we are looking for a percent change, it doesn't matter actual values, right?
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Re: Guy's net income equals his gross income minus his deduction [#permalink] New post 06 Jun 2013, 01:00
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marcovg4 wrote:
I have a question:

If the problem provided with a Gross and Deduction ratio, then the correct answer would have been be C?

Since we are looking for a percent change, it doesn't matter actual values, right?


Yes, you are right.
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NEW TO MATH FORUM? PLEASE READ THIS: ALL YOU NEED FOR QUANT!!!

PLEASE READ AND FOLLOW: 11 Rules for Posting!!!

RESOURCES: [GMAT MATH BOOK]; 1. Triangles; 2. Polygons; 3. Coordinate Geometry; 4. Factorials; 5. Circles; 6. Number Theory; 7. Remainders; 8. Overlapping Sets; 9. PDF of Math Book; 10. Remainders; 11. GMAT Prep Software Analysis NEW!!!; 12. SEVEN SAMURAI OF 2012 (BEST DISCUSSIONS) NEW!!!; 12. Tricky questions from previous years. NEW!!!;

COLLECTION OF QUESTIONS:
PS: 1. Tough and Tricky questions; 2. Hard questions; 3. Hard questions part 2; 4. Standard deviation; 5. Tough Problem Solving Questions With Solutions; 6. Probability and Combinations Questions With Solutions; 7 Tough and tricky exponents and roots questions; 8 12 Easy Pieces (or not?); 9 Bakers' Dozen; 10 Algebra set. ,11 Mixed Questions, 12 Fresh Meat

DS: 1. DS tough questions; 2. DS tough questions part 2; 3. DS tough questions part 3; 4. DS Standard deviation; 5. Inequalities; 6. 700+ GMAT Data Sufficiency Questions With Explanations; 7 Tough and tricky exponents and roots questions; 8 The Discreet Charm of the DS ; 9 Devil's Dozen!!!; 10 Number Properties set., 11 New DS set.


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Re: Guy's net income equals his gross income minus his deduction [#permalink] New post 04 May 2014, 07:57
Bunuel wrote:
marcovg4 wrote:
I have a question:

If the problem provided with a Gross and Deduction ratio, then the correct answer would have been be C?

Since we are looking for a percent change, it doesn't matter actual values, right?


Yes, you are right.


Hi Bunuel,

I came here to ask the same question, although I was expecting a different answer.

If we have an original ratio of Gross/Deduc, and they gave us the adjusted Gross/Deduc -- that would just mean that we have a new ratio for Gross/Deduc, correct?

If we compare the two ratios, don't we just get a old net/new net? Without knowing the anchor points, how can we still classify that as a change, wouldn't it instead just be a ratio? Meaning, a ratio of new/old could be 5/4, so the new net could be 100 and the old could be 80. Using the same theory, it could also be 200/160. The dollar amount has a much bigger change in the second example?
Re: Guy's net income equals his gross income minus his deduction   [#permalink] 04 May 2014, 07:57
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