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Difficulty:
85%
(hard)
Question Stats:
54% (03:03) correct
46%
(02:58)
wrong
based on 56
sessions
History
Date
Time
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Last year, as compared to two years ago, Elif’s gross income rose by 20 percent and her taxes fell by 20 percent . As a result, her after-tax income last year was 1/3 higher than it was two years ago.
This year, Elif’s gross income will rise again year by 20% and her taxes will fall again by 20 percent. By what percent will her after-tax income rise this year as compared to last year ?
A. 20%
B. 28%
C. 32%
D. 36%
E. 40%
_________________
This year, Elif’s gross income will rise again year by 20% and her taxes will fall again by 20 percent. By what percent will her after-tax income rise this year as compared to last year ?
A. 20%
B. 28%
C. 32%
D. 36%
E. 40%
_________________
Kevin Armstrong
Gmatclasses
Madrid , Spain
Gmatclasses
Madrid , Spain
kevincan
Last year compared to 2 yrs ago.
If 2 yrs ago, the gross income and Taxes were 5x and 5y respectively.
Gross income rose by 20% = 6x
Taxes fell by 20% = 4y
Given that the last year income is (1/3) higher than 2 yrs ago.
(4/3)*(5x -5y) = (6x -4y)
20x - 20y = 18x -12y
X= 4y
LAST YEAR : (To make calculation bit fast, assume y =100)
Gross income = 6x = 6*4y = 24y = 2400
Taxes = 4y =400
Net value = 2400 -400 = 2000.
This year,
Gross income rises by 20% = 2400 + 480 = 2880
Tax fell by 20% = 400 - 80 = 320.
Net value = 2880 -320 = 2560.
% increase. = 560 / 2000 = 28%.
Option B
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