Hi j_shreyans,
This question can be solved with algebra or by TESTing THE ANSWERS. Here's how using the answers can help you to find the solution...
Both insurance plans require the insured to pay part of the total cost, then the insurance company pays "the rest", so it's important to keep track of what the insured pays. We're asked for the cost level in which both plans pay out the same amount.
Lets' start with B: $1,000
Plan A: insured pays $1,000 or 50%, whichever is smaller....
The insured pays 50%($1,000) = $500
The Plan pays $500
Plan B: insured pays the first $300, then 20% of what's left...
The insured pays $300 + 20%($700) = $440
The Plan pays $560
The two values ($500 and $560) are different, so B is NOT the answer.
Now try D: $5300
Plan A:
The insured pays $1,000
The Plan pays $4300
Plan B:
The insured pays $300 + 20%($5000) = $1300
The Plan pays $4000
The two values ($4300 and $4000) are different, so D is NOT the answer.
Notice when we tested Answer B that Plan B PAID MORE, but when we tested Answer D that Plan B PAID LESS. At some point between those two values, a "switch" occurred. The only answer that could be the same for both plans will be between B and D. Here's the proof:
Answer C: $3800
Plan A:
The insured pays $1000
The Plan pays $2800
Plan B:
The insured pays $300 + 20%($3500) = $1000
The Plan pays $2800
Both Plans pay the same amount!
Final Answer: C
GMAT assassins aren't born, they're made,
Rich
