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credit card limit

by rahulg83 » Thu Jun 18, 2009 7:20 am
Sally has a gold credit card with a certain spending limit, and a platinum card with twice the spending limit of the gold card. Currently, she has a balance on her gold card that is 1/3 of the spending limit on that card, and she has a balance on her platinum card that is 1/5 of the spending limit on that card. If Sally transfers the entire balance on her gold card to her platinum card, what portion of her limit on the platinum card will remain unspent?

A) 11/30
B) 29/60
C) 17/30
D) 19/30
E) 11/15

[spoiler]OA D
IMO A[/spoiler]

[spoiler]My approach
GC spending limit = x GC balance = x/2
PC spending limit = 2x PC balance = 2x/5
After transfer = PC balance = x/2 + 2x/5 = 11x/15

Now as i think, balance is same as amount unspent.
therefore fraction (11x/15)/2x = 11x/30
But according to solution, balance = 2x-(11x/15) :?: [/spoiler]
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by tohellandback » Thu Jun 18, 2009 7:24 am
same here..IMO A.
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by ssmiles08 » Thu Jun 18, 2009 7:38 am
IMO D?

I just picked numbers for this one b/c the answer is in fraction form anyway.

gold card limit = 150
platinum card limit = 300.

amount of money Sally has on gold card = 50 = (150)*(1/3)
amount Sally has on her Platinum card = 60 = 300*(1/5)

after she transfers her money from the gold card to her platinum card: 110/300

= 11/30

the amount of free space she has on her card: 1-(11/30) = 19/30
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by tohellandback » Thu Jun 18, 2009 7:53 am
ssmiles08 wrote:IMO D?

I just picked numbers for this one b/c the answer is in fraction form anyway.

gold card limit = 150
platinum card limit = 300.

amount of money Sally has on gold card = 50 = (150)*(1/3)
amount Sally has on her Platinum card = 60 = 300*(1/5)

after she transfers her money from the gold card to her platinum card: 110/300

= 11/30

the amount of free space she has on her card: 1-(11/30) = 19/30
its asking for amount unspent..
The powers of two are bloody impolite!!
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by gmatplayer » Thu Jun 18, 2009 8:09 am
There is no need to choose numbers here. Simple way:

She has 1/5 balance on platinum
and 1/3 on gold,
This means she has 1/6th balance on gold of her platinum limit
So add 1/5+1/6
total balance on platinum= 11/30
Amount unspent = 1-11/30
= 19-30
(D)
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by tohellandback » Thu Jun 18, 2009 8:17 am
gmatplayer wrote:There is no need to choose numbers here. Simple way:

She has 1/5 balance on platinum
and 1/3 on gold,
This means she has 1/6th balance on gold of her platinum limit
So add 1/5+1/6
total balance on platinum= 11/30
Amount unspent = 1-11/30
= 19-30
(D)
isn't that amount spent???
The powers of two are bloody impolite!!
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by rahulg83 » Thu Jun 18, 2009 8:22 am
tohellandback wrote:
gmatplayer wrote:There is no need to choose numbers here. Simple way:

She has 1/5 balance on platinum
and 1/3 on gold,
This means she has 1/6th balance on gold of her platinum limit
So add 1/5+1/6
total balance on platinum= 11/30
Amount unspent = 1-11/30
= 19-30
(D)
isn't that amount spent???
This exactly is my issue. Balance should be amount unspent. If i have 50k as my credit limit and balance as 30k, that means i have spent 20k and unspent amount (or balance) is 30k.
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by ssmiles08 » Thu Jun 18, 2009 8:26 am
I dunnoo...I took it as Sally has a spent $50 in her $150 limit. I am guessing that's how the OA looked at it.

I got 11/30 too when I did the first time around.
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by scoobydooby » Thu Jun 18, 2009 10:55 am
rahulg83 wrote: This exactly is my issue. Balance should be amount unspent. If i have 50k as my credit limit and balance as 30k, that means i have spent 20k and unspent amount (or balance) is 30k.
balance on a credit card=> amount i have spent on purchases and owe the credit card company (30k)

credit limit=> Max amount of purchase i can make on credit if i want to (50k)

portion of the limit on the card remaining unspent=>20/50

if it were a bank account, it would be interpreted as : amount unspent.
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by gmatplayer » Thu Jun 18, 2009 12:43 pm
Total limit on credit card = Unspent amount + Balance

Balance is also called "balanced due", the amount you owe to credit card company.

$ 100 Total limit = $20 Unspent + $80 Balance
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by dumb.doofus » Thu Jun 18, 2009 6:53 pm
Simplest thing is.. have you ever heard of balance transfers? If you have you would know that what you transfer from one credit card to the other is not the unspent amount but what you owe to the credit company. So the balance on a credit card is always the amount that you owe to the credit company..
that's it.
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