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Price of Lunch

Expert replies
by chgordon » Wed Dec 03, 2014 7:04 pm
Q: The price of lunch for 15 people was $207.00 including a 15 percent gratuity for service. What was the average price per person, EXCLUDING the gratuity?

A. $11.73
B. $12.00
C. $13.80
D. $14.00
E. $15.87

So,

$207.00*85%=x ; x=price of lunch EXCLUDING gratuity
x=$175.95
avg. price per person = $175.95/15 = $11.73 (A)

Where am I going wrong? The correct answer is B
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Source: — Problem Solving |

by GMATGuruNY » Wed Dec 03, 2014 7:36 pm
The price of lunch for 15 people was $207.00,
including a 15 percent gratuity for service. What was
the average price per person, EXCLUDING the
gratuity?

(A) $11.73
(B) $12.00
(C) $13.80
(D) $14.00
(E) $15.87
We can plug in the answers, which represent the cost per person.
Given that the total cost is an INTEGER, the correct answer is almost certainly an integer itself.
Answer choice D is too great, since 15 people paying $14 each = 15*14 = 210 -- yields a value beyond the total cost of 207.

Answer choice B: $12 per person without gratuity
Total price for 15 people = 15*12 = 180.
Price + gratuity = 180 + .15(180) = 180+27 = 207.
Success!

The correct answer is B.

Algebraic approach:

Let x = the cost per person WITHOUT gratuity.
Cost for 15 people without gratuity = 15x.
Cost for 15 people with gratuity = 115% of the cost without gratuity = (115/100)(15x).
Since the total cost with gratuity is 207, we get:
(115/100)(15x) = 207
x = (207 * 100) / (115 * 15).

Here is one way to simplify:

Divide both 100 and 15 by 5:
(207 * 100) / (115 * 15)
(207 * 20) / (115 * 3).

Divide 3 into 207; divide both 20 and 115 by 5:
(207 * 20) / (115 * 3)
(69 * 4) / 23.

Divide 23 into 69:
(69 * 4) / 23
3 * 4
12.
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by chgordon » Thu Dec 04, 2014 7:23 am
Thank you!

I guess I am curious why I can't start with the total price of lunch with gratuity.

So, $207. Since this includes the 15% gratuity, then to get the price without gratuity, multiply the total price by 85% (1-gratutity (15%).

why does this not give the same answer?
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by GMATGuruNY » Thu Dec 04, 2014 7:42 am
chgordon wrote:Thank you!

I guess I am curious why I can't start with the total price of lunch with gratuity.

So, $207. Since this includes the 15% gratuity, then to get the price without gratuity, multiply the total price by 85% (1-gratutity (15%).

why does this not give the same answer?
The step in red is the equivalent of subtracting 15% OF THE FINAL PRICE.
But the gratuity is not equal to 15% of the final price; the gratuity is equal to 15% OF THE BASE PRICE.
The two values are not the same.
Private tutor exclusively for the GMAT and GRE, with over 20 years of experience.
Followed here and elsewhere by over 1900 test-takers.
I have worked with students based in the US, Australia, Taiwan, China, Tajikistan, Kuwait, Saudi Arabia -- a long list of countries.
My students have been admitted to HBS, CBS, Tuck, Yale, Stern, Fuqua -- a long list of top programs.

As a tutor, I don't simply teach you how I would approach problems.
I unlock the best way for YOU to solve problems.

For more information, please email me (Mitch Hunt) at [email protected].
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by confused13 » Thu Dec 04, 2014 9:39 am
When do I know, whether to use price/1.15 or when to multiply price*0.85 ?
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by [email protected] » Thu Dec 04, 2014 11:54 am
Hi confused13,

In these types of situations, we have to think about the "timeline"....

Here, we had a bill, THEN the 15% gratuity was added, then we had a total:

X + .15X = 207

1.15X = 207

This is the equation that will get us the value of X...

X = 207/1.15

At NO POINT was the idea of 85% mentioned, so that should not be in your original calculation.

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Rich
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