Two years ago Claude spent 15 percent of his total income on travel re

Question

Two years ago Claude spent 15 percent of his total income on travel related expenses. Last year he earned 10 percent less than the year before, but also spent 15 percent of his total income on travel. If he earned 15 percent more this year than last, but again spent 15 percent of his total income on travel, the amount he spent on travel this year is what percent of the amount he spent on travel last year?

A. 85%
B. 110%
C. 115%
D. 118%
E. 125%

A. 85%
B. 110%
C. 115%
D. 118%
E. 125%

generis · Answer

Let amount earned 2 years ago = $100

Amount earned 1 year ago: (.9)($100) = $90
Amount spent on travel: (.15)(90) = $13.50

Amount earned this year: (1.15)($90) = $103.50
Amount spent on travel: (.15)($103.50) = $15.525

This year's travel amount is what percent of last year's travel amount?
 \frac{Part}{Whole}=\frac{15.525}{13.5}\approx{\frac{15}{13}}\approx{1.15}*100 = 115  %

Answer C

*Solving this way, the amount he spent on travel expenses 2 years ago does not matter. (.15*100 = $15)

AshutoshB · Answer

My question is to u is , why we need to take assumption for income of two years ago,
We need to find change in expenditure percentage of this and last year only

So how 2years earlier income information is relevant

Sent from my ONEPLUS A3003 using  GMAT Club Forum mobile app

generis · Answer

AshutoshB  - you are 100 percent correct. We don't need it.

I find, however, that if testers are  assigning values , and only one variable is asked for in the prompt --
they often waste time trying to decide whether they need to consider the other variable.
The prompt asks specifically for travel expenses for this year and last year.
Expenses from two years ago do not figure into anything.

If people use 100, however, and are not sure whether   matters, people test it.
100 = 90 percent of something, and the "something" turns out to be $111.11 . . .
I have seen that $111.11 figure rattle people a few too many times.
So I "controlled for nerves" and left it alone.

I should have known better, and explained both cases. +1 to you

If a tester is cool under pressure, she will realize that expenses are a function of income.
If the prompt asks about only two years' of expenses? Then we need to consider only those two years' income.

Let 100 = 90 percent of income two years ago. Perfect!

Last year's income = $100 (and it does not matter that 100 is 90 percent of something; it is still 100!) 
Last year's amount spent on travel: (.15)$100 = $15 = 15
This year's income, 15 percent raise: (1.15)(100) = $115
This year's amount spent on travel: (.15)$115 = $17.25 = 17 \frac{1}{4} 
This year's travel amount as fraction of last year's travel amount (fractions are easier):

\frac{\frac{69}{4}}{15} = \frac{69}{4} * \frac{1}{15} =\frac{69}{60} = \frac{23}{20} = 1.15 * 100 = 115  percent

ScottTargetTestPrep · Answer

Two years ago, Claude earned D dollars. So, he spent 0.15D on travel.

Last year, he earned 0.9D and spent 0.15 x 0.9D = 0.135D on travel.

This year, he earned 1.15 x 0.9D = 1.035D and spent 0.15 on travel, so he spent 0.15 x 1.035D on travel.

Thus:

Travel this year/travel last year = (0.15 x 1.035D)/(0.135D) = 0.15 x 7.77 = 115%

Answer: C

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