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Ann's new bicycle

Expert replies
by pareekbharat86 » Sun Dec 15, 2013 3:59 am
Ann can have her bicycle repaired for $50, or she can trade it in, as is, and receive $22 credit toward the purchase of a new bicycle that sells for $107. If Ann trades in her current bicycle, the cost to her of purchasing the new bicycle is what percent greater than the cost of having her current bicycle repaired?
(A) 44%
(B) 60%
(C) 70%
(D) 114%
(E) 170%

OA is C.

I also checked C. But isn't the true 'cost' 107 instead of 85? She is giving up her old bicycle which probably costs 22$ in the market today. From a finance point of view, the true cost to Ann must be 107 and the answer should be [spoiler]114% i.e. D[/spoiler]

Correct me if I am wrong.
Thanks,
Bharat.
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Source: — Problem Solving |

by Brent@GMATPrepNow » Sun Dec 15, 2013 7:25 am
pareekbharat86 wrote:
I also checked C. But isn't the true 'cost' 107 instead of 85? She is giving up her old bicycle which probably costs 22$ in the market today. From a finance point of view, the true cost to Ann must be 107 and the answer should be [spoiler]114% i.e. D[/spoiler]

Correct me if I am wrong.
I don't know enough about accounting/finance to say whether or not the "true cost" is $107 or $85.

However, if the correct answer is C, then I suppose they are referring to the net cost of the new bike (although I don't know enough about accounting/finance to say whether or not the term "net cost" is accurate here either :-))

Here's a hypothetical question: let's say a new bike costs only $50, which means Ann can just trade her old bike for a new bike.
Would you say that the new bike cost $50 or $0

Cheers,
Brent
Brent Hanneson - Creator of GMATPrepNow.com
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by Brent@GMATPrepNow » Sun Dec 15, 2013 7:30 am
pareekbharat86 wrote:Ann can have her bicycle repaired for $50, or she can trade it in, as is, and receive $22 credit toward the purchase of a new bicycle that sells for $107. If Ann trades in her current bicycle, the cost to her of purchasing the new bicycle is what percent greater than the cost of having her current bicycle repaired?
(A) 44%
(B) 60%
(C) 70%
(D) 114%
(E) 170%

Cost to repair old bike: $50
Net cost of new bike = $107 - $22 = $85

The cost of purchasing the new bicycle is what percent greater than the cost of having her current bicycle repaired?

In other words, $85 is what percent greater than $50?
Well, $85 is what $35 greater than $50
So, 35/50 = 70/100 = [spoiler]70% = C[/spoiler]

Cheers,
Brent
Brent Hanneson - Creator of GMATPrepNow.com
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by Abhishek009 » Sun Dec 15, 2013 10:00 am
pareekbharat86 wrote:Ann can have her bicycle repaired for $50, or she can trade it in, as is, and receive $22 credit toward the purchase of a new bicycle that sells for $107.
The quoted part means -

Cost of repairing the cycle is $50

Cost of New Cycle is $ 107

Selling Price of Old Bicycle is $ 22
pareekbharat86 wrote: receive $22 credit toward the purchase of a new bicycle that sells for $107.
Since the new cycle is being sold at $ 107 and she receives $22 for that it means that whe will have to pay just $85 for the new bicycle..

pareekbharat86 wrote:If Ann trades in her current bicycle, the cost to her of purchasing the new bicycle is what percent greater than the cost of having her current bicycle repaired?
Selling Price of Old Bicycle is $ 22

Cost of New Bicycle is $ 85

Cost of having her current bicycle repaired is $ 50

Amount which Ann has to pay more is $ 35


So the required % is (35/50 )*100 => 70%
Abhishek
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