Source: Official Guide for GMAT Review 2016 Problem Solving; #9

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# When Leo imported a certain item, he

When Leo imported a certain item, he paid a 7 percent import tax on the portion of the total value of the item in excess of \$1,000. If the amount of the import tax that Leo paid was \$87.50, what was the total value of the item?

### 5 Explanations

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Here is what I did.
Did not tried to solve instead just looked at the answer options and reduced 1000 from each and found 10% of the rest by removing the last 0. So option A gave 10% tax as 60, B gave 10% tax as 85, C gave 125, D gave 240. E I didn't even checked. Now I eliminated A & B because 10% tax was less than 87.5 hence gone. Option D gave 10% as 240 which means 5% is 120 so it can't be answer. Option E is even bigger so out. Now the only option left is C.

Sep 4, 2017 • Comment

Sam Kinsman, Magoosh Tutor

That's a great way to approach this problem. Good job! :D

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As the word "excess" explain itself that it's the extra amount that has to be subtracted from the actual value,helps to solve the problem.

Mar 16, 2017 • Comment

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Bari Cruze

Mike- i knew the answer to this was 8750/7 (plus the initial grand), but what number sense path was i supposed to follow to get to 1250? Am I really supposed to be dividing that in my head no problem?

Sep 21, 2016 • Comment

Cydney Seigerman, Magoosh Tutor

Hi Bari,

I agree that calculating 8750/7 is not the easiest to do as mental math. However, the calculation is useful to solve the question. So, in this case, I'd recommend doing the calculation 8750/7 by hand, which will allow you to solve the overall problem more efficiently :)

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FELIPE SAITO DOS SANTOS

Since the question asked for the total value of the item, wouldn´t that include taxes?

Jan 15, 2016 • Comment

Cydney Seigerman, Magoosh Tutor

The wording of this question can definitely be confusing. However, the total value of the time does not include the taxes. It refers to the price without tax. The question itself helps us realize this when it says "he paid a 7% import tax on the port of the total value of the item in excess of \$1000..." In other words, the total value of the item is independent on the tax. The tax, on the other hand, depends on the total value of the item.

I hopes this clears up your doubts! :) Mike McGarry, Magoosh Tutor