OG 12 DS 79

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OG 12 DS 79

by sachindia » Wed Aug 01, 2012 8:06 am
Leo can buy a certain computer for p1 dollars in State
A, where the sales tax is t1 percent, or he can buy the
same computer for p2 dollars in State B, where the
sales tax is t2 percent. Is the total cost of the
computer greater in State A than in State B ?
(1) t1 > t2
(2) p1t1 > p2t2
Regards,
Sach

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by eagleeye » Wed Aug 01, 2012 9:33 am
sachindia wrote:Leo can buy a certain computer for p1 dollars in State
A, where the sales tax is t1 percent, or he can buy the
same computer for p2 dollars in State B, where the
sales tax is t2 percent. Is the total cost of the
computer greater in State A than in State B ?
(1) t1 > t2
(2) p1t1 > p2t2
I dislike the wording of this one since we are never told whether p1 is price before or after taxes. Anyway, if the price is after taxes, or before, doesn't have final bearing on the answer of this question but it does make you a little confused. I am going to assume that the price p1 is marked price before taxes.

Now we are asked:
Is p1 + p1t1/100 > p2 + p2t2/100

With that in mind let's check the options:

1. t1>t2
We don't know how p1 and p2 stack against each other. Insufficient.

2. p1t1>p2t2
Again, We don't know how p1 and p2 stack against each other. Insufficient.

Together, we know that t1>t2 and p1t1>p2t2.

Now depending on the relative size of t1 vs t2, p1 can either be equal to larger than or smaller than p2. We may possibly get p1 + p1t1/100 >, =, < p2 + p2t2/100. Insufficient again.

E is correct.

:)

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by GMATGuruNY » Wed Aug 01, 2012 6:10 pm
sachindia wrote:Leo can buy a certain computer for p1 dollars in State
A, where the sales tax is t1 percent, or he can buy the
same computer for p2 dollars in State B, where the
sales tax is t2 percent. Is the total cost of the
computer greater in State A than in State B ?
(1) t1 > t2
(2) p1t1 > p2t2
To save time, try to plug in combinations that satisfy both statements.

Let p1 = 100 and t1 = 20, so that p1t1 = 100*20 = 2000.
Let p2 = 100 and t2 = 10, so that p2t2 = 100*10 = 1000.
A = p1 + (t1% of p1) = 100 + (20% of 100) = 120.
B = p2 + (t2% of p2) = 100 + (10% of 100) = 110.
A>B.

Let p1 = 100 and t1 = 20, so that p1t1 = 100*20 = 2000.
Let p2 = 110 and t2 = 10, so that p2t2 = 110*10 = 1100.
A = p1 + (t1% of p1) = 100 + (20% of 100) = 120.
B = p2 + (t2% of p2) = 110 + (10% of 110) = 121.
A<B.

Since A>B in the first case and A<B in the second case, the two statements combined are INSUFFICIENT.

The correct answer is E.
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by sachindia » Sat Aug 04, 2012 2:34 am
Thanks Mitch and EagleEye.

As Eagleeye pointed out, wording of the Q does confuse us. X(
Regards,
Sach