Hi praveensahni,
"Remainder" questions are not a big part of the GMAT, but you're likely to see 1 on Test Day. Thankfully the concepts involved are pretty simple:
First, when dealing with remainders, you CANNOT "reduce" the fractions involved. Remainders are essentially "leftover pieces" in a division problem. If you change the numbers in the question, then you change the remainder.
In order to answer to your question, I'm going to start with a different example:
What is the remainder when 12 is divided by 10?
12/10 = 1 remainder 2
The reason is because 10 "goes into" 12 one time and 2 is "leftover."
What is the remainder when 2 is divided by 10?
2/10 = 0 remainder 2
The reason is because 10 "goes into" 2 zero times and the 2 is "leftover."
In most non-remainder questions, you'll be expected to reduce any fractions involved (or possibly convert the answer to another format). For example, if you prove that the answer to the question is 4/10, then the correct answer (if it were written as a fraction) would appear as 2/5. It could also appear as 0.4 or 40%.
GMAT assassins aren't born, they're made,
Rich