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# A special municipal payroll tax charges not tax on a payroll less than

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Math Expert
Joined: 02 Sep 2009
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A special municipal payroll tax charges not tax on a payroll less than  [#permalink]

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10 Mar 2015, 05:56
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Difficulty:

55% (hard)

Question Stats:

62% (01:34) correct 38% (01:31) wrong based on 91 sessions

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A special municipal payroll tax charges not tax on a payroll less than $200,000 and only 0.1% on a company’s payroll above$200,000. If Belfried Industries paid $200 in this special municipal payroll tax, then they must have had a payroll of A.$180,000
B. $202,000 C.$220,000
D. $400,000 E.$2,200,000

Kudos for a correct solution.

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Re: A special municipal payroll tax charges not tax on a payroll less than  [#permalink]

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10 Mar 2015, 06:15
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Hi

The 200 paid is 0.1% of the additional amount above 200,000. Let it be X

Now 0.1% of X = 200

Therefore X= 200,000

Total = 200,000 + X= 400,000
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Re: A special municipal payroll tax charges not tax on a payroll less than  [#permalink]

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10 Mar 2015, 12:48
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ANSWER : D , ( with different approach) :

0.1 % (x-200,000 ) =200 $so , if we plug -in answer D : we will have : 0.1 % ( 400,000 - 200,000 ) = 0.1 % ( 200,000 ) for easy calculation , first consider : 0.1 * 200,000 = 20,000 so apply % it means here 1/100 so: 1/100 * 20,000 = 200 !!!! so LHS is EQUAL TO RHS !!! therefore , the total payroll is 400,000$ ANSWER D ....
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A special municipal payroll tax charges not tax on a payroll less than  [#permalink]

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10 Mar 2015, 13:46
(x-200,000)*1/100 = 200 ---> x-200,000 = 200*100 ---> x = 20,000 + 200,000 ---> x = answer C : $220,000 To verify: 20,000 * 1/100 =$200
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Re: A special municipal payroll tax charges not tax on a payroll less than  [#permalink]

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10 Mar 2015, 16:30
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1/100 so: 1/100 * 20,000 = 200 !!!!

GaryDunn wrote:
(x-200,000)*1/100 = 200

Be careful. 0.1% is 0.001 or 1/1000, not 1/100.
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Re: A special municipal payroll tax charges not tax on a payroll less than  [#permalink]

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10 Mar 2015, 19:50
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Assume, X=payroll taxable (with more than $200K0; therefore as per question X*.1/100 = 200; X = 200,000. Total payroll = payroll not taxable +payroll taxable = 200,000+200,000 = 400,000 Therefore answer is D,$400,000

Thanks
Lipsi
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Re: A special municipal payroll tax charges not tax on a payroll less than  [#permalink]

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15 Mar 2015, 21:07
Bunuel wrote:
A special municipal payroll tax charges not tax on a payroll less than $200,000 and only 0.1% on a company’s payroll above$200,000. If Belfried Industries paid $200 in this special municipal payroll tax, then they must have had a payroll of A.$180,000
B. $202,000 C.$220,000
D. $400,000 E.$2,200,000

Kudos for a correct solution.

MAGOOSH OFFICIAL SOLUTION:

METHOD ONE: the step-by-step algebraic inefficiency method:
payroll tax = 0.1% of (payroll income – 200,000)
Remember that 0.1% as a decimal is 0.001.
payroll tax = 0.001*(payroll income – 200,000)
200 = 0.001*(x – 200,000)
200/0.001 = 200,000 = x – 200,000
200,000 + 200,000 = 400,000 = x
NB: this method requires one to know a couple tricky ideas about percents & decimals.

Well, 0.1% of something is $200. Multiply this by ten — then 1% of something is$2000. Now, multiply this by 100 —- 100% of something is $200,000. That’s the amount over the$200,000 baseline, so the total payroll must have been the sum, $400,000. Answer = (D) METHOD THREE: backsolving One would use this either if one didn’t know how to do either of the first two approaches, or simply if one thought this would be faster. Start with (C). Suppose payroll =$220,000. The first $200,000 is tax free, so only$20,000 is taxed at 0.1%. Well, 1% of $20,000 — knock off two zeros: 1% would be$200. Divide by ten now: 0.1% would be $20. That’s too little. Payroll must be more, so we can immediately eliminate choice (A) & (B) & (C). Even if we had no more time to work on this problem, we could employ solution behavior very effectively at this point. You could try another answer, (D) or (E), or you could just notice — with (C), the taxable part was ten times too small, because the payroll tax was ten times too small. We need a taxable portion that is ten times bigger — instead of$20,000, we need a taxable portion of $200,000. Add this to the baseline =$400,000.

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Re: A special municipal payroll tax charges not tax on a payroll less than  [#permalink]

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19 Mar 2015, 00:08
Bunuel wrote:
A special municipal payroll tax charges not tax on a payroll less than $200,000 and only 0.1% on a company’s payroll above$200,000. If Belfried Industries paid $200 in this special municipal payroll tax, then they must have had a payroll of A.$180,000
B. $202,000 C.$220,000
D. $400,000 E.$2,200,000

Kudos for a correct solution.

$$(X-200,000)*0.1% = 200$$
X=400,000
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Re: A special municipal payroll tax charges not tax on a payroll less than  [#permalink]

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17 Jan 2018, 07:24
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Re: A special municipal payroll tax charges not tax on a payroll less than   [#permalink] 17 Jan 2018, 07:24
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