In this article, we’re going to tackle a challenging GMATPrep problem solving question from the topic of Percents.  (The GMATPrep software can be downloaded for free at MBA.com)

Let’s start with the problem.

Set your timer for 2 minutes… and… GO!

*Before being simplified, the instructions for computing income tax in country R were to add 2 percent of one’s annual income to the average (arithmetic mean) of 100 units of country R’s currency and 1 percent of one’s annual income. Which of the following represents the simplified formula for computing the income tax, in country R’s currency, for a person in that country whose annual income is I?

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