hard · GMAT Quant
A taxpayer's current gross income G satisfies 60,000 ≤ G ≤ 100,000. Tax rules: • Deduction = max!big(8,000,; 0.10Gbig). • Taxable income = G - deduction. • Tax before credits = 10% of the first $40,000 of taxable income, plus 25% of taxable income above $40,000. • A $1,500 credit applies if G < 80,000; otherwise no credit. The taxpayer's current final tax is $10,000. Next year, gross income increases by a positive whole-number percent p, and the same rules apply.
What is the greatest possible p for which next year's final tax is no more than $12,500?
- 2%
- 3%
- 4%
- 5%
- 6%
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