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29 Dec 2014, 09:01
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D
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
35%
(medium)
Question Stats:
72% (02:21) correct
28%
(02:54)
wrong
based on 402
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Tough and Tricky questions: Percents.
Tracey sold her house for 40 percent more than the amount that she bought it for. If she has to pay a brokerage fee of 5 percent of the selling price of the home, and then has to pay 40 percent of the leftover profit in taxes, what is the net after-tax percent profit Tracey makes on the sale?
A. 12%
B. 14.4%
C. 16%
D. 19.8%
E. 21%
Kudos for a correct solution.
29 Dec 2014, 10:09
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Lets assume Cost price is 100. Then the selling price will be 1.4*100= 140.
5% brokerage fee= 5% of 140 = 7
After brokerage amount left is 140-7=133.
Next, taxes are 40% of left over profit which is 40% of (133-100)=40% of 33 which is 19.8.
Hence answer is D.
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Please give kudos if you feel the answer is right
5% brokerage fee= 5% of 140 = 7
After brokerage amount left is 140-7=133.
Next, taxes are 40% of left over profit which is 40% of (133-100)=40% of 33 which is 19.8.
Hence answer is D.
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Please give kudos if you feel the answer is right
General Discussion
29 Dec 2014, 10:14
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The tricky part in this question is to see which numbers the percentage are referring to. Since we are asked about the percent profit, we don't need to use any absolute values in our calculation.
We start with the 40% That Tracey makes on the sales of the house. The 40% profit refers to the original house price, but the agent fee refers to the final sales price. As the sales price is 40% higher than the original purchase price, we need to convert the 5% fee into percent of the original price. For that, we can pick numbers. We assume that the original price was 100. The sales price them was 140, as it is 40% higher. The 5% agent fee of a final sales price of 140 is 7. After paying the agent, Tracey is therefore left with 133, or 33% of the original price.
Of that 33%, she then needs to pay 40% tax. We can directly calculate what is left for Tracey after the tax, 60% of her 33% pre-tax profit.
\(\frac{33}{100}*\frac{6}{10}=\frac{198}{1000}=19.8%\)
Answer D.
We start with the 40% That Tracey makes on the sales of the house. The 40% profit refers to the original house price, but the agent fee refers to the final sales price. As the sales price is 40% higher than the original purchase price, we need to convert the 5% fee into percent of the original price. For that, we can pick numbers. We assume that the original price was 100. The sales price them was 140, as it is 40% higher. The 5% agent fee of a final sales price of 140 is 7. After paying the agent, Tracey is therefore left with 133, or 33% of the original price.
Of that 33%, she then needs to pay 40% tax. We can directly calculate what is left for Tracey after the tax, 60% of her 33% pre-tax profit.
\(\frac{33}{100}*\frac{6}{10}=\frac{198}{1000}=19.8%\)
Answer D.
