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Next year, a certain executive will receive a 15-percent [#permalink]

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06 Sep 2004, 21:49

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Next year, a certain executive will receive a 15-percent increase in base salary, but will no longer receive her $8000 yearly bonus. If next year's salary represents a 7-percent net increase in income from this year, what is this year's base salary?

A) 100,000
B) 105,000
C) 107,000
D) 115,000
E) 123,050

My answer is 107000 as well, but after I saw the solutions from ywilfred and jimishg, I have a question for you guys:

What is your definition of income? Do you agree or disagree the following

Income = Base salary + Bonus

If bonus does not account for your income, then how do we call it?

This is where we can two different answers. For people who get 107000, we treat bonus as a portion of income; for people who get 100000, they think bonus is not a part of income.

We need OA, pls!

Last edited by jinino on 07 Sep 2004, 20:36, edited 1 time in total.

The reason is that in the question it is mentioned that the person in the second year will not get his or her yearly bonus of $ 8000. Therefore I believe the bonus will not be part of the income as I assume the bonus is yearly fixed on $ 8000.

Six figure salaries are interesting, so this question interests me. (115/100)X - 8000 = (107/100)X X=100,000

I too did like this and got it wrong. The mistake in this is that we are subtracting the non-existant boonus from next years salary, whereas it should be added with current year's salary to make it an "income".

OA is (C) 107,000. Anuramm's method is simple and correct.

anuramm wrote:

Let this years base salary be x. then 1.07 (x + 8000 ) = 1.15x x= 107000,hence C.

jinino wrote:

What is your definition of income? Do you agree or disagree the following: Income = Base salary + Bonus

Next year, a certain executive will receive a 15-percent increase in base salary, but will no longer receive her $8000 yearly bonus. If next year's salary represents a 7-percent net increase in income from this year, what is this year's base salary?

Let this years base salary = x
Total income this year = x + 8000
Total income next year = 1.15x