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GMAT Prep - Jane's Credit Card

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GMAT Prep - Jane's Credit Card

by tutonaranjo » Thu Aug 30, 2007 11:27 am
On Jane's credit card account, the average daily balance for a 30-day billing cycle is the average (arithmetic mean) of the daily balances at the end of each of the 30 days. At the beginning of a certain 30 day billing cycle, Jane's credit card account had a balance of $600. Jane made a payment of $300 on the account during the billing cycle. If no other amounts were added to or substracted from the account during the billing cycle, what was the average daily balance on Jane's account for the billing cycle?

1) Jane's payment was credited on the 21st day of the billing cycle

2) The average daily balance through the 25th day of the billing cycle was $540

Answer is D
Could someone please explain this?
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Re: GMAT Prep - Jane's Credit Card

by ratindasgupta » Thu Aug 30, 2007 11:38 am
tutonaranjo wrote:On Jane's credit card account, the average daily balance for a 30-day billing cycle is the average (arithmetic mean) of the daily balances at the end of each of the 30 days. At the beginning of a certain 30 day billing cycle, Jane's credit card account had a balance of $600. Jane made a payment of $300 on the account during the billing cycle. If no other amounts were added to or substracted from the account during the billing cycle, what was the average daily balance on Jane's account for the billing cycle?

1) Jane's payment was credited on the 21st day of the billing cycle

2) The average daily balance through the 25th day of the billing cycle was $540

Answer is D
Could someone please explain this?

1) If Jane's payment was credited on 21st, then day 1 to day 20 would have a $600 balance and day 21 onwards, the balance will be $300. So SUFF

2) If average daily balance till 25th is $540, its obvious that the payment is already credited. Hence, day 26 onwards the balance will be $300 everyday. Hence SUFF

Answer is therefore D.

Hope this clears your doubt.
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by aj5105 » Tue Jun 23, 2009 3:17 am
I am unable to understand the question. Help needed,please.
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by david4431 » Tue Jun 23, 2009 4:43 am
This questions is asking you if it is possible to find the average amount in Jane's account. All you need for that is the amount of money in her account at the end of the day.

S1 tells you how much is in her account at the end of each day, so it is sufficient.

S2 tells you the average in her account up to a point in time. As ratin pointed out, this too is sufficient because it must be that payment was made at some past point. To see that this is true, multiply 540 by 25. Multiply 300 by 5 (remaining days). Sum the products and divide by 30 to get the daily balance. It will match the daily balance you get from S1.
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by abhinav85 » Tue Jun 23, 2009 6:56 am
2) The average daily balance through the 25th day of the billing cycle was $540
I did'nt get this how this statement is sufficient???

I understand the statment as Jane balance was $600 on 1st and then how
the balance came down to $540 on the 26th.???
Why they deducted only $60??

Could anyone explain this.............it will be really appreciated!!!
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by david4431 » Tue Jun 23, 2009 8:08 am
Consider how the average daily balance is calculated. You add the balance at the end of each previous day up and divide by the number of days. If Jane's balance was 600 for 20 days, her average daily balance will be 600. If on the 21st day, she paid 300, then her balance at the end of the day will be 300. The average daily balance would thus be less than 600 at the end of day 21 since there is now a value less than 600 being incorporated into the average.

As for why the average daily balance was lowered by 60, the reason is because a certain number of days had passed. If for 20 days the balance was 600 and for 5 days the balance was 300 each day, if you calculate the average, you will get 540.
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by abhinav85 » Tue Jun 23, 2009 8:18 am
Got it david...........thx bro
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