Question: A’s income is 25% more than B’s income. B’s income in terms of A’s income is

A. 75%
B. 80%
C. 90%
D. 96%
E. 97%

Answer: B

Approach Solution (1):
Formulate using direct proportion with percentages.
25 percent more is 1+.25
A = (1 + 0.25)B
B = A/1.25
B = 0.8 A
So B's income is 80 percent of A's income
Correct option: B

Approach Solution (2):
Let's use an example, and then derive a formula:
Suppose B's income is $100. A's income is 25% more, which is +$25, or $125.
So far, we have A = B + .25B
Or A = 1.25B
To find B in terms of A, we divide both sides by 1.25:
A/1.25 = B,
This can be simplified to
B=A/(5/4)
OrB = 4A/5 or B = 0.8 A
This also means that B's income is 80% of A's income, or 20% less than A's income.
Correct option: B

Approach Solution (3):
B’s income is 1
A’s income is 1.25
So, 1 divides by 1.25 = 80%
Correct option: B

“A’s income is 25% more than B’s income. B’s income in terms of A’s income is”- is a topic of the GMAT Quantitative reasoning section of GMAT. This question has been taken from the book “GMAT Official Guide Quantitative Review”. To solve GMAT Problem Solving questions a student must have knowledge about a good amount of qualitative skills. The GMAT Quant topic in the problem-solving part requires calculative mathematical problems that should be solved with proper mathematical knowledge.

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