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The income tax in country X is 8% of any income up to $5000. For incom

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The income tax in country X is 8% of any income up to $5000. For incom  [#permalink]

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New post 06 Sep 2016, 04:03
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E

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98% (01:41) correct 2% (03:37) wrong based on 76 sessions

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The income tax in country X is 8% of any income up to $5000. For incomes over $5,000, an 8% tax is imposed on the first $5,000, and a 10% tax is imposed on the portion of the total income in excess of $5000. If Perry paid $950 in income tax last month, then what was Perry's income?

A. $10,500
B. $11,000
C. $13,000
D. $13,500
E. $14,000

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Re: The income tax in country X is 8% of any income up to $5000. For incom  [#permalink]

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New post 06 Sep 2016, 05:48
Bunuel wrote:
The income tax in country X is 8% of any income up to $5000. For incomes over $5,000, an 8% tax is imposed on the first $5,000, and a 10% tax is imposed on the portion of the total income in excess of $5000. If Perry paid $950 in income tax last month, then what was Perry's income?

A. $10,500
B. $11,000
C. $13,000
D. $13,500
E. $14,000


Given : For incomes over $5,000, an 8% tax is imposed on the first $5,000, and a 10% tax is imposed on the portion of the total income in excess of $5000. If Perry paid $950 in income tax last month, then what was Perry's income?

for first 5000 , 8% tax then we get 400$ as tax.

Now Perry paid 950$ tax... we need to check which option is going to yield 550$ on the remaining amount.

A. $10,500 - 5000 = 5500 , then we get 10% tax , we get 550$... ( $10,500 - 5000 - here already for 5000$ we have calculated the tax and we need to tally for the remaining amount)

550+400 = 950$...hence this is the option.

IMO option A.
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Re: The income tax in country X is 8% of any income up to $5000. For incom  [#permalink]

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New post 06 Sep 2016, 08:03
The question says that 8% is for $5000 which is 400$ and 10% for the potion of income above 5000$.

In the case 950$ is total tax out of which 400 is for 5000$ income. The remaining 550$ is 10% of the potion above 5000$ I.e 550/10% - 5500$.

5500 + 5000 = 10500$ , hence option A

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Re: The income tax in country X is 8% of any income up to $5000. For incom  [#permalink]

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New post 06 Sep 2016, 08:56
8% of 5000 is $400
Then I subtracted 950-400 = 550 to get the tax on income above $5000.
based on this income above $5000 must have been $5500

So total income is $5000+$5500 = $10500

Answer 1
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Re: The income tax in country X is 8% of any income up to $5000. For incom  [#permalink]

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New post 06 Sep 2016, 21:55
Bunuel wrote:
The income tax in country X is 8% of any income up to $5000. For incomes over $5,000, an 8% tax is imposed on the first $5,000, and a 10% tax is imposed on the portion of the total income in excess of $5000. If Perry paid $950 in income tax last month, then what was Perry's income?

A. $10,500
B. $11,000
C. $13,000
D. $13,500
E. $14,000


1st 5000, he pays 8% = 400
Remaining 950 -400 =550
10% of X = 550 => X = 550 X 10 = 5500
Perry's income = 5000 + 5500 = 10500 Answer A
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The income tax in country X is 8% of any income up to $5000. For incom  [#permalink]

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New post 21 Jun 2017, 02:31
Bunuel wrote:
The income tax in country X is 8% of any income up to $5000. For incomes over $5,000, an 8% tax is imposed on the first $5,000, and a 10% tax is imposed on the portion of the total income in excess of $5000. If Perry paid $950 in income tax last month, then what was Perry's income?

A. $10,500
B. $11,000
C. $13,000
D. $13,500
E. $14,000


This question is a bit tricker then a normal 500 level percentage PS question but anyhow read carefully- the basic idea behind this question is that Perry's 950$ tax comprises the regular %8 percent tax and a %10 percent tax on some unknown amount of additional income. More to the point, we're basically trying to figure 10% of what amount adds up to a $950 tax with the 8% required tax in mind so here we have

$5,000(.08) = $400

$950-$450 = $550

x(.10) -$550
x= $550/(.10)
x =$5,500

$5,000 + $5,500 = $10,500

Thus
"A"
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Re: The income tax in country X is 8% of any income up to $5000. For incom  [#permalink]

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Re: The income tax in country X is 8% of any income up to $5000. For incom &nbs [#permalink] 06 Aug 2018, 22:07
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