If the total income of a state increases by 50% and the population of

Hi All,

These types of percent-based questions are often perfect for TESTing VALUES (and the number 100 tends to be a great number to TEST).

We're told that the total income of a state increases by 50% and the total population increases by 20%

To start:
Total Income = $100
Total Population = 100 people
$100/100 = $1 per person

After the increase:
New Total Income = $150
New Total Population = $120
$150/120 = $5/4 per person

The question asks for the percent increase in per capita income, which means that we need to use the Percentage Change Formula:

Percent Change = (New - Old)/Old

New = 5/4
Old = 1

(5/4 - 1)/1 = (1/4)/1 = 1/4 = 25% increase

Final Answer:

GMAT assassins aren't born, they're made,
Rich