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24 Feb 2012, 23:27
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Last year the first $30,000 of each Country X resident's annual taxable income was taxed at the rate of 15 percent, and taxable income in excess of$ 30,000 was taxed at a rate of 27 percent. If Mr. Smith was a resident last year, was all of his taxable income taxed at the 15 percent rate?

(1) Last year Mr. Smith's tax, based on his taxable income, was $3,750. (2) If Mr. Smith's taxable income had been twice as much as it was, his tax would have been$ 9,900.
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Re: PT #8 DS 15 [#permalink]

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25 Feb 2012, 01:00
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Last year the first $30,000 of each Country X resident's annual taxable income was taxed at the rate of 15 percent, and taxable income in excess of$ 30,000 was taxed at a rate of 27 percent. If Mr. Smith was a resident last year, was all of his taxable income taxed at the 15 percent rate?

Basically the question asks whether Mr. Smith's income was less than or equal to $30,000. Also notice that for$30,000 tax is $30,000*0.13=$4,500.

(1) Last year Mr. Smith's tax, based on his taxable income, was $3,750. Since the tax was less than$4,500 then the income was less than $30,000. Sufficient. (2) If Mr. Smith's taxable income had been twice as much as it was, his tax would have been$ 9,900. From $9,900,$4,500 was paid on $30,000 and the rest$5,400 were paid on an additional income (income over $30,000) at a rate of 27%. Additional income would be: x*0.27=$5,400 --> x=$20,000. So, if Mr. Smith's taxable income had been twice as much it would be$30,000+$20,000=$50,000, so his actual income is $50,000/2=$25,000. Sufficient.

Answer: D.

Hope it's clear.
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Re: Last year the first $30,000 of each Country X resident's [#permalink] ### Show Tags 29 Mar 2017, 05:47 Hello from the GMAT Club BumpBot! Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos). Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email. _________________ Re: Last year the first$ 30,000 of each Country X resident's   [#permalink] 29 Mar 2017, 05:47
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