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The graph on the left shows the annual revenue growth rate of Company 14 Jul 2015, 00:53
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72% (02:45) correct 28% (02:57) wrong based on 228 sessions

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The graph on the left shows the annual revenue growth rate of Company X. The graph on the right shows the tax rate as a percent of revenue for each year. If Company X's revenue in year ‘99 was $98.1 million, which one of the following is closest to how much more the company paid in taxes in year ‘01 than ‘00?

A. $4 million
B. $6 million
C. $13 million
D. $15 million
E. $20 million

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B
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The graph on the left shows the annual revenue growth rate of Company Updated on: 14 Jul 2015, 04:19
Originally posted by GMATinsight on 14 Jul 2015, 03:00.
Last edited by GMATinsight on 14 Jul 2015, 04:19, edited 1 time in total.
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Bunuel

The graph on the left shows the annual revenue growth rate of Company X. The graph on the right shows the tax rate as a percent of revenue for each year. If Company X's revenue in year ‘99 was $98.1 million, which one of the following is closest to how much more the company paid in taxes in year ‘01 than ‘00?

A. $4 million
B. $6 million
C. $13 million
D. $15 million
E. $20 million

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99' Revenue = 98.1

00' Revenue = 1.04*98.1 = 102.024
tax in 00' = 20% of 102.024 = 20.4084


01' Revenue = 1.05*102.024 = 107.1252
tax in 00' = 25% of 107.1252 = 26.7813

Difference in taxes of 01' and 00 = 26.7813 - 20.4084 = $6 million approx

Answer: option B
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The graph on the left shows the annual revenue growth rate of Company 14 Jul 2015, 03:48
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GMATinsight
Bunuel

The graph on the left shows the annual revenue growth rate of Company X. The graph on the right shows the tax rate as a percent of revenue for each year. If Company X's revenue in year ‘99 was $98.1 million, which one of the following is closest to how much more the company paid in taxes in year ‘01 than ‘00?

A. $4 million
B. $6 million
C. $13 million
D. $15 million
E. $20 million

Kudos for a correct solution.

Show Spoiler
Attachment:
test3_qt19.gif

99' Revenue = 98.1

00' Revenue = 1.02*98.1 = 102.024
tax in 00' = 20% of 102.024 = 20.4084


01' Revenue = 1.05*102.024 = 107.1252
tax in 00' = 25% of 107.1252 = 26.7813

Difference in taxes of 01' and 00 = 26.7813 - 20.4084 = $6 million approx

Answer: option B
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Hi GMATinsight,
Correction -
Though 00' Revenue is correct, percentage increase is 4, not 2.
00' Revenue = 1.02*98.1 = 102.024
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The graph on the left shows the annual revenue growth rate of Company 19 Jul 2015, 12:39
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Bunuel

The graph on the left shows the annual revenue growth rate of Company X. The graph on the right shows the tax rate as a percent of revenue for each year. If Company X's revenue in year ‘99 was $98.1 million, which one of the following is closest to how much more the company paid in taxes in year ‘01 than ‘00?

A. $4 million
B. $6 million
C. $13 million
D. $15 million
E. $20 million

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800score Official Solution:

There are a few steps to solving this problem:
First, given 1999 revenue of $98.1 million, we can find the revenue in 2000 and 2001 because the increase from 1999 to 2000 was 4% and the increase from 2000 to 2001 was 5% (Note: since the answer says “closest,” rounding can be done in the calculations):
1999: $98.1 million
2000: ($98.1)(1.04) = $102 million
2001: ($102)(1.05) = $107 million.

Now, given each year's revenue amounts, calculate the taxes paid:
2000: ($102)(0.20) = $20 million
2001: ($107)(0.25) = $27 million.

Now subtract the 2000 tax amount from the 2001 amount:
$27 – $20 = $7 million.

Company X paid $7 million more in taxes in 2001 than it did in 2000. The closest answer is choice (B), which is the correct answer.
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The graph on the left shows the annual revenue growth rate of Company 18 Nov 2015, 20:25
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I solved it with approximations as well

98 mln - 100% -> 0.98 = 1% or ~1 mln = 1% thus 4mln added in 2000.
we have 102 mln in 00, and increase of 5 % in revenue -> 10.2 is 10% and 5.1 mln is 5%
thus, revenue in 01 is 107.1 mln

now, from 102 mln company paid 20% or 20.4 mln
from 107.1 paid 25%. 10.7 = 10%. 21.4 = 20%, 5.35 = 5% -> total tax paid in 01 = 26.75 mln

now, 26.75-20.4 mln = ~ 6 mln.
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The graph on the left shows the annual revenue growth rate of Company 20 Jan 2026, 05:05
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