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A company accountant estimates that airfares next year for business trips of a thousand miles or less...

Expert replies
by BTGmoderatorLU » Thu Aug 27, 2020 3:03 pm

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Source: GMAT Paper Tests

A company accountant estimates that airfares next year for business trips of a thousand miles or less will increase by 20 percent and airfares for all other business trips will increase by 10 percent. This year total airfares for business trips of a thousand miles or less were $9,900 and airfares for all other business trips were $13,000. According to the accountant's estimate, if the same number of business trips will be made next year as this year, how much will be spent for airfares next year?

A. $22,930
B. $26,180
C. $26,330
D. $26,490
E. $29,770

The OA is B
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Source: — Problem Solving |

A company accountant estimates that airfares next year for business trips of a thousand miles or less will increase by 20 percent and airfares for all other business trips will increase by 10 percent. This year total airfares for business trips of a thousand miles or less were $9,900 and airfares for all other business trips were $13,000. According to the accountant's estimate, if the same number of business trips will be made next year as this year, how much will be spent for airfares next year?

Airfares from thousand miles or less business trips will rise by 20% from last year and airfare from business trips for other trips will rise by 10% if the same number of trips as this year are made next year.

Next years airfare spend will be:
1.2*9900 + 1.1*13000
= 11880 + 14300
= 26180
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BTGmoderatorLU wrote:
Thu Aug 27, 2020 3:03 pm

A company accountant estimates that airfares next year for business trips of a thousand miles or less will increase by 20 percent and airfares for all other business trips will increase by 10 percent. This year total airfares for business trips of a thousand miles or less were $9,900 and airfares for all other business trips were $13,000. According to the accountant's estimate, if the same number of business trips will be made next year as this year, how much will be spent for airfares next year?

A. $22,930
B. $26,180
C. $26,330
D. $26,490
E. $29,770

The OA is B
Solution:

We are given that airfares for business trips of a thousand miles or less will increase 20% next year from $9,900 this year. Thus, the cost of airfares for business trips of a thousand miles or less next year is 1.2 x 9,900 = $11,880. We are also given that airfares for all other business trips will increase 10% next year from $13,000 this year. Thus, the cost of airfares for all other business trips next year is 1.1 x 13,000 = $14,300.

So, 11,880 + 14,300 = $26,180 dollars should be allotted for airfares next year.

Answer: B

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