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Automobile installment credit

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by yass20015 » Mon Aug 10, 2015 11:39 am
At the end of year X, automobile installment credit accounted for 36% of all outstanding consumer installment credit. At that time automobile finance companies extended 57$ billion of credit, or 1/3 of the automobile installment credit. How many billion dollars of consumer installment credit was outstanding at that time?
A) 62
B) 171
C) 475
D) 513
E) 684
I really did not understand anything in this question, starting by the wording etc...Can you help please? Many thanks
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by Brent@GMATPrepNow » Mon Aug 10, 2015 11:44 am
At the end of year X, automobile installment credit accounted for 36% of all outstanding consumer installment credit. At that time automobile finance companies extended $57 billion of credit, or 1/3 of the automobile installment credit. How many billion dollars of consumer installment credit was outstanding at that time?

A. 62
B. 171
C. 475
D. 513
E. 684
This questions illustrates the importance of ALWAYS checking the answer choices BEFORE getting bogged down with time-consuming calculations. For more on this important strategy, you can watch our free video: https://www.gmatprepnow.com/module/gener ... es?id=1111

IMPORTANT: Notice that the answer choices are reasonably spread apart. This means we may be able to use some ESTIMATION to find the answer quickly.

$57 billion of credit equals 1/3 of the automobile installment credit
So, the automobile installment credit = (3)($57 billion) = $171 billion

Automobile installment credit accounted for 36% of all outstanding consumer installment credit
IMPORTANT ESTIMATION CONCEPTS:
If x is 25% of y, then y = 4x
If x is 33 1/3% of y, then y = 3x
If x is 50% of y, then y = 2x
Since 36% is a little more than 33 1/3% we can conclude the following: if x is 36% of y, then y = a little less than 3x

The question tells us that automobile installment credit (worth $171 billion) accounts 36% of all outstanding consumer installment credit.
In other words, $171 billion is 36% of all outstanding consumer installment credit.
So, all outstanding consumer installment credit = little less than 3($171)
3(171) = 513, so the correct answer is a little less than $513 billion.
Answer choice C is a little less than $513 billion, so it must be the correct answer.

Cheers,
Brent
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by GMATGuruNY » Mon Aug 10, 2015 1:36 pm
At the end of year X, automobile installment credit accounted for 36% of all outstanding consumer installment credit. At that time automobile finance companies extended $57 billion of credit, or 1/3 of the automobile installment credit. How many billion dollars of consumer installment credit was outstanding at that time?

A. 62
B. 171
C. 475
D. 513
E. 684
An alternate approach is to rephrase the percentage (36%) and the fraction (1/3) as two RATIOS.

Let A = automobile installment credit, C = all outstanding consumer installment credit, and E = extended credit.

Automobile installment credit accounted for 36% of all outstanding consumer installment credit.
Thus:
A/C = 36/100 = 9/25.

Finance companies extended 1/3 of the automobile installment credit.
In other words, $1 of credit was extended for every $3 of automobile installment credit.
Thus:
E/A = 1/3.

Since E/C = E/A* A/C, we get:
E/C = 1/3 * 9/25 = 3/25.

Since E/C = 3/25 implies that C = (25/3)E, we get:
C = (25/3)(57) = (25)(19) = 475.

The correct answer is C.
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by nikhilgmat31 » Wed Aug 12, 2015 12:09 am
I will leave the estimation to the end.

automobile credit = 57 * 3 = 171 billion

36% of total = 171

total = 171 * 100/36

>500 17100/36 > 400

so answer is 475 as their is only 1 option starting with 4
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by Pazoki » Tue Jun 14, 2016 9:22 pm
Quote:
At the end of year X, automobile installment credit accounted for 36% of all outstanding consumer installment credit. At that time automobile finance companies extended $57 billion of credit, or 1/3 of the automobile installment credit. How many billion dollars of consumer installment credit was outstanding at that time?

A. 62
B. 171
C. 475
D. 513
E. 684


There is no need for estimation as answer clearly can be calculated as follow:
57*3=171 as 36% of credit so 171/36% => 1%=4.75 (this step takes about 20 seconds for calculation) and therefore 100% = 475. Answer C is correct.
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by Matt@VeritasPrep » Thu Jun 23, 2016 5:12 pm
We could write that a little more neatly, I think.

We start with

57 = (1/3)c

and

c = (36/100)x = (9/25)x

so

57*3 = (9/25)x

or

19*3*3 = (3*3*x)/25

or

19 = x/25

and

25*19 = x
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by Vikasx » Thu Jan 26, 2017 7:54 am
Here is my calculation:

1/3rd of 36% = 12% of X = $57 Billion

12/100 * X = 57

X = 57*100/12 = $475 Billion

Let me know if anything is missing.
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by Jeff@TargetTestPrep » Mon Jan 30, 2017 4:50 pm
yass20015 wrote:At the end of year X, automobile installment credit accounted for 36% of all outstanding consumer installment credit. At that time automobile finance companies extended 57$ billion of credit, or 1/3 of the automobile installment credit. How many billion dollars of consumer installment credit was outstanding at that time?
A) 62
B) 171
C) 475
D) 513
E) 684
We are given that at the end of year X, automobile installment credit accounted for 36% of all outstanding consumer installment credit and that at that time, automobile finance companies extended $57 billion of credit, or 1/3 of the automobile installment credit.

If we let A = the amount of automobile credit, we can create the following equation:

57 billion = (1/3)A

171 billion = A

Since automobile credit or A = 171 billion, and automobile installment credit accounted for 36% of all outstanding consumer installment credit, we can create the following equation in which N = all outstanding credit.

0.36N = 171 billion

N = (171 billion)/0.36

N = 475 billion

Answer: C

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by gocoder » Tue Oct 10, 2017 8:39 am
57 billion is 1/3rd of the automobile installment credit, which is 36% of the total pending credit.
so 57 billion is 12% of the total credit.
to find the total credit, we can do this
57*100/12=19*3*100/(4*3)=475 billion
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by Matt@VeritasPrep » Wed Oct 11, 2017 5:33 pm
Vikasx wrote:Here is my calculation:

1/3rd of 36% = 12% of X = $57 Billion

12/100 * X = 57

X = 57*100/12 = $475 Billion

Let me know if anything is missing.
Looks good to me!
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by Brent@GMATPrepNow » Wed Jan 10, 2018 12:15 pm
yass20015 wrote:At the end of year X, automobile installment credit accounted for 36% of all outstanding consumer installment credit. At that time automobile finance companies extended 57$ billion of credit, or 1/3 of the automobile installment credit. How many billion dollars of consumer installment credit was outstanding at that time?
A) 62
B) 171
C) 475
D) 513
E) 684
This questions illustrates the importance of ALWAYS checking the answer choices BEFORE getting bogged down with time-consuming calculations. For more on this important strategy, you can watch our free video: https://www.gmatprepnow.com/module/gener ... es?id=1111

IMPORTANT: Notice that the answer choices are reasonably spread apart. This means we may be able to use some ESTIMATION to find the answer quickly.

$57 billion of credit equals 1/3 of the automobile installment credit
So, the automobile installment credit = (3)($57 billion) = $171 billion

Automobile installment credit accounted for 36% of all outstanding consumer installment credit
IMPORTANT ESTIMATION CONCEPTS:
If x is 25% of y, then y = 4x
If x is 33 1/3% of y, then y = 3x
If x is 50% of y, then y = 2x
Since 36% is a little more than 33 1/3% we can conclude the following: if x is 36% of y, then y = a little less than 3x

The question tells us that automobile installment credit (worth $171 billion) accounts 36% of all outstanding consumer installment credit.
In other words, $171 billion is 36% of all outstanding consumer installment credit.
So, all outstanding consumer installment credit = little less than 3($171)
3(171) = 513, so the correct answer is a little less than $513 billion.
Answer choice C is a little less than$513 billion, so it must be the correct answer.

Cheers,
Brent
Brent Hanneson - Creator of GMATPrepNow.com
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