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# Minimum Bonus

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Manager
Joined: 26 Apr 2010
Posts: 121
Concentration: Strategy, Entrepreneurship
Schools: Fuqua '14 (M)
Followers: 2

Kudos [?]: 65 [0], given: 54

Minimum Bonus [#permalink]  26 Nov 2010, 13:52
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Difficulty:

(N/A)

Question Stats:

29% (01:01) correct 71% (03:07) wrong based on 7 sessions
Source: Knewton

$686,000 in bonus money is to be divided among 6 employees. No employee is to receive a bonus more than 20% greater than the bonus received by any other employee. What is the minimum possible bonus that an employee can receive? (A)$96,000
(B) $97,000 (C)$98,000
(D) $99,000 (E)$100,000
[Reveal] Spoiler: OA

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Manager
Joined: 02 Apr 2010
Posts: 103
Followers: 5

Kudos [?]: 105 [0], given: 18

Re: Minimum Bonus [#permalink]  26 Nov 2010, 14:03
The question stem states that the difference between the minimum and maximum bonus may not exceed 20%. To determine the minimum possible bonus for an employee you have to assume that the other 5 employees obtain the maximum possible bonus.

If x denotes the minimum possible bonus and 1.2x denotes the maximum possible bonus you can set up the equation as follows:

x + 5*1.2x = $686,000 => 7x =$686,000 => x = $98'000 Hence, solution c is correct. Veritas Prep GMAT Instructor Joined: 16 Oct 2010 Posts: 6062 Location: Pune, India Followers: 1597 Kudos [?]: 8953 [0], given: 195 Re: Minimum Bonus [#permalink] 26 Nov 2010, 19:15 Expert's post Stanford2012 has explained the solution perfectly. The only thing I want to highlight here is the concept. Let's say you have a fixed sum of$100 that needs to be distributed among 5 people. If you want to maximize one person's share, you need to give everyone else the minimum that you can. e.g. the question says each person must receive at least $10, what is the maximum one person can receive? Since you want to maximize one person's share, you should give everyone else the minimum possible i.e.$ 10. You give $10 to each of the other 4 people and are left with$60, the maximum that you can give to one guy.
Similarly, if you want to minimize someone's share, you should give everyone else the maximum possible.

In your question here, a fixed amount has to be distributed among 6 people and one person's minimum share needs to be found. A person will receive minimum (say $x) , when everyone else gets the maximum that they can (that will be$6x/5).
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Re: Minimum Bonus   [#permalink] 26 Nov 2010, 19:15
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