Hi All,
We’re told that the AVERAGE salary of 10 employees last year was $42,800 (meaning that the TOTAL of those salaries was $428,000). We’re asked for the average salary of those same 10 employees this year. This is a great “concept” question – meaning that you do not actually have to do any math to answer it, as long as you understand the concepts involved.
1) For 8 of the 10 employees, the year’s salary is 15 percent greater than last year’s salary.
To start, it’s worth noting that we do not know any of the actual salaries of the 10 employees, so in addition to not knowing what happened to the other 2 salaries, we don’t know how much these 8 salaries actually increased in absolute terms.
For example, if those 8 employees each earned $10,000 last year, then the increase in their salaries was (.15)($10,000) = $1500 each.
If those 8 employees each earned $20,000 last year though, then the increase in their salaries was (.15)($20,000) = $3000 each.
Those two outcomes would change the total of the 10 salaries in different ways, so the answer to the question would change.
Fact 1 is INSUFFICIENT.
2) For 2 of the 10 employees, this year’s salary is the same as last year’s salary.
While the information in Fact 2 is simpler to deal with than the information in Fact 1, the overall logic is the same: we don’t know what happened to the salaries of the other 8 people (nor any of the individual salaries or how they may have changed) – and the answer to the question will change based on that information.
Fact 2 is INSUFFICIENT.
Combined, we know:
-For 8 of the 10 employees, the year’s salary is 15 percent greater than last year’s salary.
-For 2 of the 10 employees, this year’s salary is the same as last year’s salary.
Even combined, we run into the same issue that we faced with Fact 1 – we have no idea what any of the individual salaries are (and which ones were increased by 15%). Thus, the average salary this year could vary.
Combined, INSUFFICIENT
Final Answer:
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Rich
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