Question

The sum of the weekly salaries of 5 employees is $3,250. If each of the 5 salaries is to increase by 10 percent, then the average (arithmetic mean) weekly salary per employee will increase by [Official GMAT-2018]

Hint:

When a value increases by a certain percentage, you can find the increase by multiplying the original value by the percentage (expressed as a decimal), and then add that to the original value to find the new value.

Answer 1

Step 1: Calculate the current average salary.
The total sum of the salaries of 5 employees is $3,250. To find the current average salary, divide the total sum by the number of employees:
\[ \text{Current average} = \frac{3250}{5} = 650 \] Thus, the current average weekly salary per employee is $650.
Step 2: Calculate the increase in salary.
Each salary is increased by 10 percent. To calculate the new average, first find the increase for one employee:
\[ \text{Increase per employee} = 10\% \times 650 = 0.1 \times 650 = 65 \] Step 3: Calculate the new average salary.
Now, add the increase to the current average salary:
\[ \text{New average} = 650 + 65 = 715 \] Step 4: Calculate the increase in the average salary.
The increase in the average salary is:
\[ \text{Increase in average} = 715 - 650 = 65 \] Step 5: Conclusion.
The average weekly salary per employee will increase by $65.