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Leo can buy a certain computer for p1 dollars in State A, [#permalink]
08 Jan 2008, 05:21

Leo can buy a certain computer for p1 dollars in State A, where the sales tax is t1 percent, or he can buy the same computer for p2 dollars in State B, where the sales tax is t2 percent. Is the total cost of the computer greater in State A than in State B?

1. Tax rate alone doesn't tell us anything 2. Tax on each doesn't tell us anything Together they still don't tell us anything

Computer 1 could be $100 with a 50% tax, while Computer 2 could be $500 with a 1% tax OR Computer 1 could be $500 with a 10% tax, while Computer 2 could be $100 with a 1% tax

Both situations follow all the rules, but you get different answers for the total cost of the computers.

This a bit strange for us international students. For me, the answer should be B since in Europe all the prices you can see around include taxes. therefore, when asked about how much the item costs I consider that the pirce it costs includes taxes.

1. Tax rate alone doesn't tell us anything 2. Tax on each doesn't tell us anything Together they still don't tell us anything

Computer 1 could be $100 with a 50% tax, while Computer 2 could be $500 with a 1% tax OR Computer 1 could be $500 with a 10% tax, while Computer 2 could be $100 with a 1% tax

Both situations follow all the rules, but you get different answers for the total cost of the computers.

Thank you, yr approach help to elimilate my stupid
_________________

This a bit strange for us international students. For me, the answer should be B since in Europe all the prices you can see around include taxes. therefore, when asked about how much the item costs I consider that the pirce it costs includes taxes.

OA is E indeed

Obviously OA is not B. I have never seen a GMAT question asking me to calculate x and then telling me that x=4, for example.

I hate the type of questions you are suppose to know more that maths to be able to resolve it...

Total cost= Cost of product and the Tax , in Country A P1 is the price and T1 is the tax total cost together is P1t1 similary in Country B the total coast is P2T2 B choice says P1T1 > P2T2 - is this not the staright answer?

Total cost= Cost of product and the Tax , in Country A P1 is the price and T1 is the tax total cost together is P1t1 similary in Country B the total coast is P2T2 B choice says P1T1 > P2T2 - is this not the staright answer?

Where am I wrong? Is my approach wrong

because P1T1 = tax on P1 and P2T2 = tax on P2

you're thinking of 1+T1 and 1+T2. As it stands now, if the tax rate is 5% then T1 will be .05 and not 1.05. You need that 1 in there to maintain the cost and ADD the tax. As it stands now we're just getting the tax, and still need to know the base price to get the total cost.

It seemed funny to me to pay 15% on tip and 8% on taxes.... How much is the one on lottery?

Yeah, tipping is just a way for certain places to pass costs on to the consumer, whether they're warranted or not.

The "stupid people tax" is a joke in America. Since your chances of winning the lottery are around 1:20,000,000 the joke is that people who play the lottery are stupid and are throwing their money away...in other words the lottery is a tax on stupid people