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market value of a certain machine

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by arora007 » Wed Dec 15, 2010 10:04 am
The market value of a certain machine decreased by 30 percent of its purchase price each year. If the machine was purchased in 1982 for its market value of $8,000, what was its market value two years later?
(A) $8,000
(B) $5,600
(C) $3,200
(D) $2,400
(E) $800
[spoiler]
An intelligent question OA: C.
source https://gmat1000ps.blocked/2010/01/section2-q1.html[/spoiler]
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by diebeatsthegmat » Wed Dec 15, 2010 10:28 am
arora007 wrote:The market value of a certain machine decreased by 30 percent of its purchase price each year. If the machine was purchased in 1982 for its market value of $8,000, what was its market value two years later?
(A) $8,000
(B) $5,600
(C) $3,200
(D) $2,400
(E) $800
[spoiler]
An intelligent question OA: C.
source https://gmat1000ps.blocked/2010/01/section2-q1.html[/spoiler]
decrease in 2 year, each year =30% so in 2 year it decreased 60% >> 100-60%=40% left
and 8000*0.4=3200???

or
decreased the first year 30% > cost left = 0.7*8000=5600
and for the second year 5600*0.7=3920
3920 is not the answer choice

this math is not clear!!! :((
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by arora007 » Wed Dec 15, 2010 1:14 pm
The value decreased is

[(8000*.3)*2] = (2400*2) ( multiply by 2 because of the text "30 percent of its purchase price each year" )

so the current value is 8000 - 4800 = 3200
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by diebeatsthegmat » Wed Dec 15, 2010 7:15 pm
arora007 wrote:The value decreased is

[(8000*.3)*2] = (2400*2) ( multiply by 2 because of the text "30 percent of its purchase price each year" )

so the current value is 8000 - 4800 = 3200
is that the solution the website gave?
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by prachich1987 » Wed Dec 15, 2010 7:40 pm
arora007 wrote:The value decreased is

[(8000*.3)*2] = (2400*2) ( multiply by 2 because of the text "30 percent of its purchase price each year" )

so the current value is 8000 - 4800 = 3200
This is still not clear to me.
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by pradeepkaushal9518 » Wed Dec 15, 2010 8:07 pm
purchase price = 8000

30 % of purchase price = 2400

first year market value is = 8000-2400=5600

second year = 5600-2400=3200

option C

i dont understand what is great in this question????????????????
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by arora007 » Wed Dec 15, 2010 11:12 pm
The great thing about this question is that people tend to

do 8000(1 - 0.7*.07) = 4080 or do 8000(1- 0.3*0.3)
dont find the answer in the given choices... then either get frustrated and guess or start recalculating in some other way...

People lose time and composure or both... The key is the wordings which one might have missed, and even after figuring out that there is some problem a quick re-read will not help.. as one's mind is already fuzzied!
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by gupta.ansh13 » Thu Dec 16, 2010 12:07 am
We can do in this way.

There is 30% of dicount in two successive years therefore net discount will be

-30-30+(-30*-30)/100 = -51%

Therefore remaining amount will be 49% = 50%(approx)

8000*50%= 4000

From the answer choices answer close to 4000 is 3200 therefore C is the answer
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by gupta.ansh13 » Thu Dec 16, 2010 12:07 am
We can do in this way.

There is 30% of dicount in two successive years therefore net discount will be

-30-30+(-30*-30)/100 = -51%

Therefore remaining amount will be 49% = 50%(approx)

8000*50%= 4000

From the answer choices answer close to 4000 is 3200 therefore C is the answer
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by pradeepkaushal9518 » Thu Dec 16, 2010 12:17 am
ya its a word problem

just to remember 30 % of purchase price and purchase price is fixed at 8000
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by ajayd » Fri Dec 17, 2010 6:23 am
In the first year, the machine loses 8000*30/100 = 2400.
remaining value =8000 - 2400 = 5600
in the second year, the machine loses 5600 * 30/100 =1680
remaining value = 5600 - 1680 = $3920 answer
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    by pradeepkaushal9518 » Fri Dec 17, 2010 7:28 am
    ajay your approach is wrong arrora is correct that people will be confused
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    Re: market value of a certain machine

    by Scott@TargetTestPrep » Tue Jan 21, 2020 8:36 am
    arora007 wrote: ↑
    Wed Dec 15, 2010 10:04 am
     The market value of a certain machine decreased by 30 percent of its purchase price each year. If the machine was purchased in 1982 for its market value of $8,000, what was its market value two years later?
    (A) $8,000
    (B) $5,600
    (C) $3,200
    (D) $2,400
    (E) $800
    [spoiler]
    An intelligent question OA: C.
    source https://gmat1000ps.blocked/2010/01/section2-q1.html[/spoiler]
    We are given that the market value of the machine decreases by 0.3 x 8000 = $2400 each year.

    Thus, the market value decreases to 8000 - 2400 = 5600 in the first year and 5600 - 2400 = 3200 in the second year.

    Answer: C

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