Before being simplified, the instructions for computing income tax in country R were to add 2% of one's annual income to the average of 100 units of R's currency and 1% of one's annual income. Which of the following represents the simplified formula for computing the income tax, in R's currency, for a person with annual income I

(A) 50 + (I/200)
(B) 50 + (3I/100)
(C) 50 + (I/40)
(D) 100 + (I/50)
(E) 100 + (3I/100)

Answer is C.

What's the best way to go about solving this problem...

Thanks

The above solution is from the GMAT-PREP 1

To get the answer I got I/50 + [100+I/100]/ 2. To get C. For this type of problem how would you know to divide by two when I did the problem I found that the only way to get the answer is divide by two. Moreover, I know you cannot average averages out-does this rule apply here? Could you please explain the rationale behind this type of problem for future reference.

Your input is greatly appreciated....

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