Mr. Goldstein decides to buy a new car with a sticker price of $45,500. If the sales tax comes out to 5 percent of the purchase price, but Mr. Goldstein is able to negotiate a purchase price that is a 20 percent discount off the sticker price, how much sales tax does Mr. Goldstein pay?
a) $455
b) $910
c) $1560
d) $1820
e) $2275
The OA is D.
Please, can any expert assist me with above problem? I don't have it clear. Thanks.
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Mr. Goldstein decides to buy a new car...
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BTGmoderatorLU
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10% of 45,500 = 4550.LUANDATO wrote:Mr. Goldstein decides to buy a new car with a sticker price of $45,500. If the sales tax comes out to 5 percent of the purchase price, but Mr. Goldstein is able to negotiate a purchase price that is a 20 percent discount off the sticker price, how much sales tax does Mr. Goldstein pay?
a) $455
b) $910
c) $1560
d) $1820
e) $2275
The OA is D.
Please, can any expert assist me with above problem? I don't have it clear. Thanks.
20% of 45,500 = 4550*2 = 9100
So if we're getting a 20% discount, the new cost would be 45,500 - 9100 = 36,400.
This is taxed at 5%. 5% of 36,400 = 1820. (10% of 36,400 = 3640, so 5% is half of this value.) The answer is D
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Alternate approach:LUANDATO wrote:Mr. Goldstein decides to buy a new car with a sticker price of $45,500. If the sales tax comes out to 5 percent of the purchase price, but Mr. Goldstein is able to negotiate a purchase price that is a 20 percent discount off the sticker price, how much sales tax does Mr. Goldstein pay?
a) $455
b) $910
c) $1560
d) $1820
e) $2275
If a car with a sticker price of $100 is discounted by 20% to $80, the resulting sales tax = (5/100)(80) = $4.
Since (resulting sales tax)/(sticker price) = 4/100 = 4%, the resulting sales tax = 4% of the sticker price.
Thus:
Mr. Goldstein's tax = (4/100)(45,500) = (4)(455) = 1820.
The correct answer is D.
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We are given that Mr. Goldstein negotiates a purchase price that is 20% less than $45,500.BTGmoderatorLU wrote:Mr. Goldstein decides to buy a new car with a sticker price of $45,500. If the sales tax comes out to 5 percent of the purchase price, but Mr. Goldstein is able to negotiate a purchase price that is a 20 percent discount off the sticker price, how much sales tax does Mr. Goldstein pay?
a) $455
b) $910
c) $1560
d) $1820
e) $2275
The OA is D.
Please, can any expert assist me with above problem? I don't have it clear. Thanks.
Thus, he pays:
0.8 x 45,500 = $36,400
Since tax is 5% of the purchase price, the amount of tax is:
36,400 x 0.05 = $1,820
Answer: D
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Hi All,
The answer choices to this question are 'spread out' enough that you can do some estimation (without having to do every exact calculation).
The starting sticker price on a car is $45,500, which I'll 'round down' to $45,000.
The 20% discount off of THAT price would be: $45,000 - (.2)($45,000) = $45,000 - $9,000 = $36,000
The 5% tax on the $36,000 = (.05)($36,000) = $1800
Since I rounded down the initial car price, the correct answer would be a little more than $1800....
Final Answer: D
GMAT assassins aren't born, they're made,
Rich
The answer choices to this question are 'spread out' enough that you can do some estimation (without having to do every exact calculation).
The starting sticker price on a car is $45,500, which I'll 'round down' to $45,000.
The 20% discount off of THAT price would be: $45,000 - (.2)($45,000) = $45,000 - $9,000 = $36,000
The 5% tax on the $36,000 = (.05)($36,000) = $1800
Since I rounded down the initial car price, the correct answer would be a little more than $1800....
Final Answer: D
GMAT assassins aren't born, they're made,
Rich
