This question asks: The insurance expense in 2004 for a certain business was $160,000. If this expense was 33% more than in 2003, what was the insurance expense in 2003?

A) $53,333
B) $106,667
C) $120,000
D) $173,333
E) Other

The correct answer is "C)". I answered "E)" because my answer was not exactly "C)". I had $120.3...K as my answer so I answered "E)". The answer sheet considers 33% as one-third and I'm wondering if it is alright to rough estimate one-third into 33%. I would have assumed that we consider the exact value of one-third, which is 33.3...3%.

It is fine to round 33% to 1/3
(I wouldn't do so with 30%, but 33% is so close that it will work.)

Veritas Help

My issue with this answer is that the question asked for "33% more than" the original value of 2003. We were given the value of 2004, so I proceeded with calculating the original value of 2003 by cross-multiplication.

Year 2004...160,000 : 133%
Year 2003..."x" : 100%

Year 2003 = (160,000 X 100%) / 133% = $120,300.75 (approx.)

I am doubtful that $120,000 is very close to $120,300.75. There is still over $300 difference between the answer and the actual calculation. Have I made a mistake in cross-multiplying in this case? Am I wrong for choosing the "Other" answer?

The difference between 120,000 and 120,300 is close to one quarter of one percent - which makes them very close...

33% is the rounded form of 1/3.
They will not represent 1/3 as 33.3333333333%. Instead, you'll generally see just 33%.

The solution is as follows:

1.33x = 160,000
(4/3) x = 160,000
x = 120,000

Veritas Help