If 12.5% of a sum of money is $40, what is the total sum of money?

• A. $320
• B. $250
• C. $400
• D. $360

Answer: (A)

To find the total sum of money when 12.5% of it equals $40, we can set up a simple equation.

We know that 12.5% can be expressed as a fraction: 12.5% = 12.5/100 = 0.125. If we let the total sum of money be represented by ( x ), then we can write the equation:

[ 0.125x = 40 ]

To find ( x ), we need to isolate it. We can do this by dividing both sides of the equation by 0.125:

[ x = \frac{40}{0.125} ]

Calculating this gives:

[ x = 40 \div 0.125 = 40 \times 8 = 320 ]

Thus, the total sum of money is $320. Therefore, the answer is indeed $320. This corresponds to the understanding that to solve for a total amount based on a percentage, dividing the known value by the fraction representation of the percentage is a straightforward method.