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profit and loss

by armaan700+ » Wed Jan 27, 2010 3:23 am
A customer using a certain phone call plan pays a fee of $25 a month, and then recieves a 40% discount on regular charges for all phone calls to country X. If calls to country X are regularly charged at $1.60 for the first 3 minutes and $0.80 for every additional minute thereafter. What is the maximum the customer could have saved over the regular charges, for 1 hr of calls he made to country X during a particular month.

A) 8.75
B) 12.00
C) 13.40
D) 17.40
E) 24.40
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by sanju09 » Wed Jan 27, 2010 3:53 am
armaan700+ wrote:A customer using a certain phone call plan pays a fee of $25 a month, and then recieves a 40% discount on regular charges for all phone calls to country X. If calls to country X are regularly charged at $1.60 for the first 3 minutes and $0.80 for every additional minute thereafter. What is the maximum the customer could have saved over the regular charges, for 1 hr of calls he made to country X during a particular month.

A) 8.75
B) 12.00
C) 13.40
D) 17.40
E) 24.40
This could have been worded in a better way to mimic GMAT, though.

The maximum saving can be assumed in case we should not avail the minutes of reduced rate. Take all 60 minutes of the hour charged as full in this case. In regular course, 60 minutes of calls this way would cost $1.60*60 = $96, whereas in the monthly plan, the same would be charged as 60% of $96, plus $25 (rental), that equals $57.60 + $25 = $82.60, and saves a maximum of $(96 - 82.60) = [spoiler]$13.40[/spoiler] to the customer. [spoiler]C[/spoiler]
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by odod » Wed Jan 27, 2010 9:07 am
Hey - I need some help. Where am I going wrong here

For a one hour call:

Regular Pricing
$1.3 for the first 3 minutes = $1.30
$0.80 for the remaining 57 minutes = $45.60

Total = $46.90


Discounted + Monthly Fee
Discounted Rate = 40% of $46.90 = $18.76
Monthly Fee = $25.00

Total = $43.76

Savings of $3.14 which isn't an option. Help please!
ODOD
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