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GMAT Prep Cost Price

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Re: GMAT Prep Cost Price

by life is a test » Sat Nov 14, 2009 8:53 pm
lance770 wrote:Just couldn't understand the wording of this question..

Help pls

LA
you have to add back the cost of the financing to the original price of the machines and then compare 2*A machine vs 1*B machine.


A: 20K -> 16K (minus 20% deposit)->0.4*16 = 6.4 = financing costs -> total cost of A = 6.4+20 = 26.4K

B: 50K -> 40K (minus 20% deposit)->0.4*40 = 16 = financing costs -> total cost of B = 16+50 = 66K

B -2A-B = 66 - (2* 26.4) = 13.2K.

Can anyone else see a shorter way of doing this??
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by lance770 » Sat Nov 14, 2009 9:13 pm
Thanks life!!!

I'd taken the financing cost as the cost, which was included in the total cost...

I guess this is the shortest method.

Thanks again.

LA
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Re: GMAT Prep Cost Price

by heshamelaziry » Sun Nov 15, 2009 2:36 am
life is a test wrote:
lance770 wrote:Just couldn't understand the wording of this question..

Help pls

LA
you have to add back the cost of the financing to the original price of the machines and then compare 2*A machine vs 1*B machine.


A: 20K -> 16K (minus 20% deposit)->0.4*16 = 6.4 = financing costs -> total cost of A = 6.4+20 = 26.4K

B: 50K -> 40K (minus 20% deposit)->0.4*40 = 16 = financing costs -> total cost of B = 16+50 = 66K

B -2A-B = 66 - (2* 26.4) = 13.2K.

Can anyone else see a shorter way of doing this??


When finding cost of A that will be repaid, why you say 20000 + 6.4 ? The stem says that he will pay 20% down payment of the 20000, which is 4000, and finance the rest, which is 16000 plus 6.4 = 22400

answer should be 11,200
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Re: GMAT Prep Cost Price

by life is a test » Sun Nov 15, 2009 8:26 am
heshamelaziry wrote:

When finding cost of A that will be repaid, why you say 20000 + 6.4 ? The stem says that he will pay 20% down payment of the 20000, which is 4000, and finance the rest, which is 16000 plus 6.4 = 22400

answer should be 11,200
the cost should be 20K + 6.4K because even though you don't pay financing cost on the deposit, its still money you have to pay towards the cost of the machine.

think of the costs as the actual money out of your pocket - you pay 4K towards the deposit, 16K for the remaining cost of the machine and 6.4K as interest.
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