Reggie purchased a car costing $8,700. As a down payment he

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swerve: Legendary Member; Posts: 2499; Joined: Sun Oct 29, 2017 2:04 pm; Followed by:6 members

Reggie purchased a car costing $8,700. As a down payment he

by swerve » Mon Nov 04, 2019 6:50 am

Reggie purchased a car costing $8,700. As a down payment, he used a $2,300 insurance settlement and an amount from his savings equal to 15 percent of the difference between the cost of the car and the insurance settlement. If he borrowed the rest of the money needed to purchase the car, how much did he borrow?

A. $6,400
B. $6,055
C. $5,440
D. $5,095
E. $3,360

The OA is C

Source: Official Guide

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Source: Beat The GMAT — Problem Solving | Mon Nov 04, 2019 6:50 am

GMAT/MBA Expert

Brent@GMATPrepNow: GMAT Instructor; Posts: 16207; Joined: Mon Dec 08, 2008 6:26 pm; Location: Vancouver, BC; Thanked: 5254 times; Followed by:1268 members; GMAT Score:770

by Brent@GMATPrepNow » Mon Nov 04, 2019 7:00 am

swerve wrote:Reggie purchased a car costing $8,700. As a down payment, he used a $2,300 insurance settlement and an amount from his savings equal to 15 percent of the difference between the cost of the car and the insurance settlement. If he borrowed the rest of the money needed to purchase the car, how much did he borrow?

A. $6,400
B. $6,055
C. $5,440
D. $5,095
E. $3,360

Reggie purchased a car costing $8,700. As a down payment, he used a $2,300 insurance settlement and an amount from his savings equal to 15 percent of the difference between the cost of the car and the insurance settlement.
The difference between the car's cost and the settlement = $8,700 - $2,300 = $6400
15% of $6400 = $960

So, amount Reggie has paid so far = $2,300 + $960 = $3260

If Reggie borrowed the rest of the money needed to purchase the car, how much did he borrow?
Amount borrowed = (total cost of car) - (total amount paid so far)
= $8700 - $3260 = $5440

Answer: C

Cheers,
Brent

Brent Hanneson - Creator of GMATPrepNow.com

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Scott@TargetTestPrep: GMAT Instructor; Posts: 8086; Joined: Sat Apr 25, 2015 10:56 am; Location: Los Angeles, CA; Thanked: 43 times; Followed by:29 members

by Scott@TargetTestPrep » Wed Nov 06, 2019 7:13 pm

swerve wrote:Reggie purchased a car costing $8,700. As a down payment, he used a $2,300 insurance settlement and an amount from his savings equal to 15 percent of the difference between the cost of the car and the insurance settlement. If he borrowed the rest of the money needed to purchase the car, how much did he borrow?

A. $6,400
B. $6,055
C. $5,440
D. $5,095
E. $3,360

The OA is C

Source: Official Guide

The difference between the cost of the car and the insurance settlement is:

8,700 - 2,300 = $6,400

Thus, the amount he took from his savings is 0.15 x 6,400 = $960.

So he had to borrow 6,400 - 960 = $5,440 to pay for the remaining cost of the car.

Answer: C

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