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In state X , there is a tax of $480 on taxable income up to  Question banks Downloads My Bookmarks Reviews Important topics Author Message TAGS: Intern Joined: 25 Oct 2004 Posts: 7 Followers: 0 Kudos [?]: 0 [0], given: 0 In state X , there is a tax of$480 on taxable income up to [#permalink]  06 Nov 2004, 04:01
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In state X , there is a tax of $480 on taxable income up to and including$12,000 and an additional tax of $250 on the amount over$12,000 up to and including $17,000. On a total taxable income of$17,000, what is the ratio of the rate of tax paid on the income in excess of $12,000 to the rate of the tax paid on the income up to and including$12,000?

(a) 1 to 4
(b) 4 to 5
(c) 1
(d) 5 to 4
(e) 4 to 1

Looking forward,
B/R
Director
Joined: 16 Jun 2004
Posts: 893
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I think the keyword is 'rate' of tax paid.

So essentially, the answer is (250/5000)/(480/12000)

which is (250/5000) * (12000/480) = 5/4.

So, D.
Intern
Joined: 25 Oct 2004
Posts: 7
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Oh , Venksune ! You are absolutely right . "Rate" is a keyword.

Thank you so much.
Oh Gal Len
Manager
Joined: 13 Oct 2004
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Quote:
I think the keyword is 'rate' of tax paid.

So essentially, the answer is (250/5000)/(480/12000)

which is (250/5000) * (12000/480) = 5/4.

Just a question.... should it not be this way ???

The tax in excess of 12000 will be 480 + 250 = 730

so the rate of tax in excess should be (730/17000) / (480/12000)

which makes it 73/(4x17) , however it does not match the answer.
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