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EXPENSES

This topic has 1 expert reply and 1 member reply
grandh01 Master | Next Rank: 500 Posts Default Avatar
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EXPENSES

Post Mon Aug 13, 2012 9:42 pm
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 is D

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anuprajan5 Master | Next Rank: 500 Posts
Joined
25 Jun 2012
Posted:
279 messages
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10 members
Upvotes:
60
Target GMAT Score:
740
Post Mon Aug 13, 2012 9:55 pm
Fuel and maintenance costs - 1/3 of 18000 = 6000
Depreciation - 3/5 of 12000 (remainder) = 7200
Remainder = 4800 - a

Insurance = 3 Financing
Financing and insurance account for 1/5 of total cost - 4F = 1/5*18000
Therefore Financing = 900
Remainder - Financing and Insurance = 4800 - 4(900) = 1200 = Taxes and License Fees

Therefore Financing is 300 less than taxes and finance fees.

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Post Thu Dec 07, 2017 10:01 am
Quote:
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
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

_________________
Jeffrey Miller Head of GMAT Instruction

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