At a certain supplier,a machine of type A costs $20,000 and a machine of type B costs $ 50,000. Each machine can be purchased by making a 20 percent down payment and repaying the reminder of the cost and finance charges over a period of time. If the finance charges are equal to 40 % of remainder of the cost, how much less would 2 machines of type A cost than 1 machine of type B under this arrangement?
A) 10,000
B)11,200
C)12,000
D)12,800
E)13,200
OA E
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liferocks
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if price is 100x
final cost is 80x+80*40x/100=80x+32x=112x
for 2A the cost will be 224x and B 112y..considering(100x=20000 and 100y=50000)
hence diff is 112*(y-2x)
now y=500 and y=200
so final diff=112*100=11200
Ans option B
final cost is 80x+80*40x/100=80x+32x=112x
for 2A the cost will be 224x and B 112y..considering(100x=20000 and 100y=50000)
hence diff is 112*(y-2x)
now y=500 and y=200
so final diff=112*100=11200
Ans option B
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Rahul@gurome
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2 types of Machine A: 20% of $40,000 = $8,000
Remaining cost for 2 machines= $40,000 - $8,000 = $32,000
Finance charges for 2 machines = (40% of $32,000) = $12,800
Down payment + Remaining cost + Finance charges for 2 machines = $8,000 + $32,000 + $12,800 =$52,800
1 type of Machine B: 20% of $50,000 = $10,000
Remaining cost for 1 machine= $40,000
Finance charges for 1 machine = (40% of $40,000) = $16,000
Down payment + Remaining cost + Finance charges for 1 machine = $10,000 + $40,000 + $16,000 =$66,000
Difference in the costs = $66,000 - $52,800 = $13,200
The correct answer is (E).
Remaining cost for 2 machines= $40,000 - $8,000 = $32,000
Finance charges for 2 machines = (40% of $32,000) = $12,800
Down payment + Remaining cost + Finance charges for 2 machines = $8,000 + $32,000 + $12,800 =$52,800
1 type of Machine B: 20% of $50,000 = $10,000
Remaining cost for 1 machine= $40,000
Finance charges for 1 machine = (40% of $40,000) = $16,000
Down payment + Remaining cost + Finance charges for 1 machine = $10,000 + $40,000 + $16,000 =$66,000
Difference in the costs = $66,000 - $52,800 = $13,200
The correct answer is (E).
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vikramveer
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Thanks Rahul what I was doing was not adding the downpayment amount to the complete total without that the total cost of the machine will not be correct and hence the difference wont... Thats the reason that my figure was not even in the option available... I believe GMAT uses small tricks like the one mentioned in this question to confuse..
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kevincanspain
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Under the payment plan, something that costs p ends up costing 0.2p +1.4(0.8)p = 1.32pselango wrote:At a certain supplier,a machine of type A costs $20,000 and a machine of type B costs $ 50,000. Each machine can be purchased by making a 20 percent down payment and repaying the reminder of the cost and finance charges over a period of time. If the finance charges are equal to 40 % of remainder of the cost, how much less would 2 machines of type A cost than 1 machine of type B under this arrangement?
A) 10,000
B)11,200
C)12,000
D)12,800
E)13,200
OA E
Since one B costs $10,000 more than 2 A's, it will end up costing 1.32(10,000) = 13,200 more under the payment plan
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Finance charges = 0.4 * 0.8 = 32% of original.selango wrote:At a certain supplier,a machine of type A costs $20,000 and a machine of type B costs $ 50,000. Each machine can be purchased by making a 20 percent down payment and repaying the reminder of the cost and finance charges over a period of time. If the finance charges are equal to 40 % of remainder of the cost, how much less would 2 machines of type A cost than 1 machine of type B under this arrangement?
A) 10,000
B)11,200
C)12,000
D)12,800
E)13,200
OA E
So difference in finance charges = 10000 * 32% = 3200
Difference in price = 10000
So total = 13200
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ssgmatter
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My question is why do we add 32000 for M/c A and 40000 for M/c B.....Please explain?Rahul@gurome wrote:2 types of Machine A: 20% of $40,000 = $8,000
Remaining cost for 2 machines= $40,000 - $8,000 = $32,000
Finance charges for 2 machines = (40% of $32,000) = $12,800
Down payment + Remaining cost + Finance charges for 2 machines = $8,000 + $32,000 + $12,800 =$52,800
1 type of Machine B: 20% of $50,000 = $10,000
Remaining cost for 1 machine= $40,000
Finance charges for 1 machine = (40% of $40,000) = $16,000
Down payment + Remaining cost + Finance charges for 1 machine = $10,000 + $40,000 + $16,000 =$66,000
Difference in the costs = $66,000 - $52,800 = $13,200
The correct answer is (E).
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Rahul@gurome
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Cost of 2 machines of type A = 2*($20,000) = $40,000ssgmatter wrote:
My question is why do we add 32000 for M/c A and 40000 for M/c B.....Please explain?
These 2 machines of type A can be purchased by making 20% down payment, so 20% of $40,000 = $8,000. Hence, the remaining cost for 2 machines of type A = $40,000 - $8,000 = $32,000
Cost of 1 machine of type B = $50,000
Machine B can be purchased by 20% down payment, so 20% of $50,000 = $10,000. Hence, remaining cost for machine A = $50,000 - $10,000 = $40,000
Does that answer your question?
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