At the end of year X, automobile installment credit accounted for 36% of all outstanding consumer installment credit. At that time automobile finance companies extended 57$ billion of credit, or 1/3 of the automobile installment credit. How many billion dollars of consumer installment credit was outstanding at that time?
A) 62
B) 171
C) 475
D) 513
E) 684
I really did not understand anything in this question, starting by the wording etc...Can you help please? Many thanks
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Automobile installment credit
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Brent@GMATPrepNow
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This questions illustrates the importance of ALWAYS checking the answer choices BEFORE getting bogged down with time-consuming calculations. For more on this important strategy, you can watch our free video: https://www.gmatprepnow.com/module/gener ... es?id=1111At the end of year X, automobile installment credit accounted for 36% of all outstanding consumer installment credit. At that time automobile finance companies extended $57 billion of credit, or 1/3 of the automobile installment credit. How many billion dollars of consumer installment credit was outstanding at that time?
A. 62
B. 171
C. 475
D. 513
E. 684
IMPORTANT: Notice that the answer choices are reasonably spread apart. This means we may be able to use some ESTIMATION to find the answer quickly.
$57 billion of credit equals 1/3 of the automobile installment credit
So, the automobile installment credit = (3)($57 billion) = $171 billion
Automobile installment credit accounted for 36% of all outstanding consumer installment credit
IMPORTANT ESTIMATION CONCEPTS:
If x is 25% of y, then y = 4x
If x is 33 1/3% of y, then y = 3x
If x is 50% of y, then y = 2x
Since 36% is a little more than 33 1/3% we can conclude the following: if x is 36% of y, then y = a little less than 3x
The question tells us that automobile installment credit (worth $171 billion) accounts 36% of all outstanding consumer installment credit.
In other words, $171 billion is 36% of all outstanding consumer installment credit.
So, all outstanding consumer installment credit = little less than 3($171)
3(171) = 513, so the correct answer is a little less than $513 billion.
Answer choice C is a little less than $513 billion, so it must be the correct answer.
Cheers,
Brent
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GMATGuruNY
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An alternate approach is to rephrase the percentage (36%) and the fraction (1/3) as two RATIOS.At the end of year X, automobile installment credit accounted for 36% of all outstanding consumer installment credit. At that time automobile finance companies extended $57 billion of credit, or 1/3 of the automobile installment credit. How many billion dollars of consumer installment credit was outstanding at that time?
A. 62
B. 171
C. 475
D. 513
E. 684
Let A = automobile installment credit, C = all outstanding consumer installment credit, and E = extended credit.
Automobile installment credit accounted for 36% of all outstanding consumer installment credit.
Thus:
A/C = 36/100 = 9/25.
Finance companies extended 1/3 of the automobile installment credit.
In other words, $1 of credit was extended for every $3 of automobile installment credit.
Thus:
E/A = 1/3.
Since E/C = E/A* A/C, we get:
E/C = 1/3 * 9/25 = 3/25.
Since E/C = 3/25 implies that C = (25/3)E, we get:
C = (25/3)(57) = (25)(19) = 475.
The correct answer is C.
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nikhilgmat31
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I will leave the estimation to the end.
automobile credit = 57 * 3 = 171 billion
36% of total = 171
total = 171 * 100/36
>500 17100/36 > 400
so answer is 475 as their is only 1 option starting with 4
automobile credit = 57 * 3 = 171 billion
36% of total = 171
total = 171 * 100/36
>500 17100/36 > 400
so answer is 475 as their is only 1 option starting with 4
Quote:
At the end of year X, automobile installment credit accounted for 36% of all outstanding consumer installment credit. At that time automobile finance companies extended $57 billion of credit, or 1/3 of the automobile installment credit. How many billion dollars of consumer installment credit was outstanding at that time?
A. 62
B. 171
C. 475
D. 513
E. 684
There is no need for estimation as answer clearly can be calculated as follow:
57*3=171 as 36% of credit so 171/36% => 1%=4.75 (this step takes about 20 seconds for calculation) and therefore 100% = 475. Answer C is correct.
At the end of year X, automobile installment credit accounted for 36% of all outstanding consumer installment credit. At that time automobile finance companies extended $57 billion of credit, or 1/3 of the automobile installment credit. How many billion dollars of consumer installment credit was outstanding at that time?
A. 62
B. 171
C. 475
D. 513
E. 684
There is no need for estimation as answer clearly can be calculated as follow:
57*3=171 as 36% of credit so 171/36% => 1%=4.75 (this step takes about 20 seconds for calculation) and therefore 100% = 475. Answer C is correct.
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Matt@VeritasPrep
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We could write that a little more neatly, I think.
We start with
57 = (1/3)c
and
c = (36/100)x = (9/25)x
so
57*3 = (9/25)x
or
19*3*3 = (3*3*x)/25
or
19 = x/25
and
25*19 = x
We start with
57 = (1/3)c
and
c = (36/100)x = (9/25)x
so
57*3 = (9/25)x
or
19*3*3 = (3*3*x)/25
or
19 = x/25
and
25*19 = x
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We are given that at the end of year X, automobile installment credit accounted for 36% of all outstanding consumer installment credit and that at that time, automobile finance companies extended $57 billion of credit, or 1/3 of the automobile installment credit.yass20015 wrote:At the end of year X, automobile installment credit accounted for 36% of all outstanding consumer installment credit. At that time automobile finance companies extended 57$ billion of credit, or 1/3 of the automobile installment credit. How many billion dollars of consumer installment credit was outstanding at that time?
A) 62
B) 171
C) 475
D) 513
E) 684
If we let A = the amount of automobile credit, we can create the following equation:
57 billion = (1/3)A
171 billion = A
Since automobile credit or A = 171 billion, and automobile installment credit accounted for 36% of all outstanding consumer installment credit, we can create the following equation in which N = all outstanding credit.
0.36N = 171 billion
N = (171 billion)/0.36
N = 475 billion
Answer: C
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57 billion is 1/3rd of the automobile installment credit, which is 36% of the total pending credit.
so 57 billion is 12% of the total credit.
to find the total credit, we can do this
57*100/12=19*3*100/(4*3)=475 billion
so 57 billion is 12% of the total credit.
to find the total credit, we can do this
57*100/12=19*3*100/(4*3)=475 billion
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Matt@VeritasPrep
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Looks good to me!Vikasx wrote:Here is my calculation:
1/3rd of 36% = 12% of X = $57 Billion
12/100 * X = 57
X = 57*100/12 = $475 Billion
Let me know if anything is missing.
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Brent@GMATPrepNow
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This questions illustrates the importance of ALWAYS checking the answer choices BEFORE getting bogged down with time-consuming calculations. For more on this important strategy, you can watch our free video: https://www.gmatprepnow.com/module/gener ... es?id=1111yass20015 wrote:At the end of year X, automobile installment credit accounted for 36% of all outstanding consumer installment credit. At that time automobile finance companies extended 57$ billion of credit, or 1/3 of the automobile installment credit. How many billion dollars of consumer installment credit was outstanding at that time?
A) 62
B) 171
C) 475
D) 513
E) 684
IMPORTANT: Notice that the answer choices are reasonably spread apart. This means we may be able to use some ESTIMATION to find the answer quickly.
$57 billion of credit equals 1/3 of the automobile installment credit
So, the automobile installment credit = (3)($57 billion) = $171 billion
Automobile installment credit accounted for 36% of all outstanding consumer installment credit
IMPORTANT ESTIMATION CONCEPTS:
If x is 25% of y, then y = 4x
If x is 33 1/3% of y, then y = 3x
If x is 50% of y, then y = 2x
Since 36% is a little more than 33 1/3% we can conclude the following: if x is 36% of y, then y = a little less than 3x
The question tells us that automobile installment credit (worth $171 billion) accounts 36% of all outstanding consumer installment credit.
In other words, $171 billion is 36% of all outstanding consumer installment credit.
So, all outstanding consumer installment credit = little less than 3($171)
3(171) = 513, so the correct answer is a little less than $513 billion.
Answer choice C is a little less than$513 billion, so it must be the correct answer.
Cheers,
Brent
Brent Hanneson - Creator of GMATPrepNow.com
