During the four years that Mrs. Lopez owned her car, she fou

Hi All,

We're told that during the 4 years that Mrs. Lopez owned her car, she found that her total car expenses were $18,000. Fuel and maintenance costs accounted for 1/3 of the total and depreciation accounted for 3/5 of the REMAINDER. The cost of insurance was 3 times the cost of financing, and TOGETHER these two costs accounted for 1/5 of the total. If the only other expenses were taxes and license fees, we're asked: the cost of financing was how much more or less than the cost of taxes and license fees.

While this question is wordy and 'step heavy', it's based around basic Arithmetic, so if you label your work and go step-by-step through the given information, you can get to the correct answer without too much trouble.

To start, we know that fuel and maintenance was 1/3 of $18,000 = (1/3)($18,000) = $6,000.... so the remaining costs would total $12,000

Depreciation accounted for 3/5 of the remaining $12,000 = (3/5)($12,000) = $7,200... so the remaining costs would total $4,800

Insurance + Financing = 1/5 of the TOTAL = (1/5)($18,000) = $3,600... so the remaining costs would total $1,200 (the taxes and license fees)
Insurance = 3(Financing)

Insurance + Financing = $3600
3(Financing) + Financing = $3600
4(Financing) = $3600
Financing = 3600/4 = $900

Financing = $900
Taxes and Licenses = $1200
Financing is $300 LESS than Taxes and Licenses

Final Answer: D

GMAT assassins aren't born, they're made,
Rich

BTGmoderatorDC wrote:During the four years that Mrs. Lopez owned her car, she found that her total car expenses were $18,000. Fuel and maintenance costs accounted for 1/3 of the total and depreciation accounted for 3/5 of the remainder. The cost of insurance was 3 times the cost of financing, and together these two costs accounted for 1/5 of the total. If the only other expenses were taxes and license fees, then the cost of financing was how much more or less than the cost of taxes and license fees?

(A) $1,500 more

(B) $1,200 more

(C) $100 less

(D) $300 less

(E) $1,500 less

OA D

Source: Official Guide

We are given that Mrs. Lopez’s total car expenses during the four years were $18,000.

Since fuel and maintenance (F&M) costs accounted for 1/3 of the total expenses:

F&M costs = 1/3(18,000) = $6,000.

Since depreciation accounted for 3/5 of the remainder:

depreciation = 3/5(18,000 - 6,000) = 3/5(12,000) = $7,200.

Since we don’t know the actual cost of insurance or financing, except that the cost of insurance was 3 times the cost of financing, and the two costs together accounted for 1/5 of the total expenses, we can let x = cost of financing and 3x = cost of insurance, and create the following equation:

x + 3x = 1/5(18,000)

4x = 3,600

x = 900

So the cost of financing was $900 and the cost of insurance was 3($900) = $2,700.

The last expense is taxes and license (T&L) fees, so T&L fees must be the difference between the total expenses and the sum of all the items (F&M, depreciation, insurance, and financing) mentioned above. Thus:

T&L fees = 18,000 - (6,000 + 7,200 + 900 + 2,700) = 18,000 - 16,800 = $1,200

Finally, we are asked: “the cost of financing was how much more or less than the cost of taxes and license fees?” Since the cost of financing was $900 and T&L fees were $1,200, the cost of financing is $300 less than that of T&L fees.

Answer: D