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# Mr. Hernandez, who was a resident of State X for only 8

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Re: Mr. Hernandez, who was a resident of State X for only 8 [#permalink]
1
Kudos
$22,500 / 12 months =$1,875 income per month
$1,875 * 8 months of residence =$15,000 of taxable income
$15,000 * .04 tax rate =$600 of state tax paid
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Re: Mr. Hernandez, who was a resident of State X for only 8 [#permalink]
bsahil wrote:
Mr. Hernandez, who was a resident of State X for only 8 months last year, had a taxable income of $22,500 for the year. If the state tax rate were 4 percent of the year’s taxable income prorated for the proportion of the year during which the taxpayer was a resident, what would be the amount of Mr. Hernandez’s State X tax for last year? (A)$900
(B) $720 (C)$600
(D) $300 (E)$60

Since Mr. Hernadez’s taxable income is prorated for 8 months of the year, his taxable income is:

8/12 x 22,500 = 2/3 x 22,500 = 15,000

Thus, he had to pay 15,000 x 0.04 = 600 dollars in taxes.

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Re: Mr. Hernandez, who was a resident of State X for only 8 [#permalink]
The most efficient way to do it I think is as follows:

1) $22,500 * 4 =$90,000
2) move the decimal two places = $90,000 =$900
3) 2/3 * 900 = $600 e-GMAT Representative Joined: 04 Jan 2015 Posts: 3712 Own Kudos [?]: 17312 [0] Given Kudos: 165 Mr. Hernandez, who was a resident of State X for only 8 [#permalink] Expert Reply Given • Mr. Hernandez was a resident of State X for only 8 months last year. • He had a taxable income of$22,500 for the year.

To Find

• The tax for state X for Mr. Hernandez.

Approach and Working Out

• Taxable income for 8 months =$$\frac{ 8}{12 }$$× $22,500 o =$15000

• Tax = 4 % of $15000 o =$600

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Re: Mr. Hernandez, who was a resident of State X for only 8 [#permalink]
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Re: Mr. Hernandez, who was a resident of State X for only 8 [#permalink]
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