percent prob

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selango: Legendary Member; Posts: 1460; Joined: Tue Dec 29, 2009 1:28 amFollowed by: 7 members; Thanked: 135 times

by selango » Fri May 28, 2010 4:58 am

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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Source: Beat The GMAT — Problem Solving | Fri May 28, 2010 4:58 am

liferocks: Legendary Member; Posts: 576; Joined: Sat Mar 13, 2010 8:31 pmFollowed by: 1 member; Thanked: 97 times

by liferocks » Fri May 28, 2010 5:09 am

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

"If you don't know where you are going, any road will get you there."
Lewis Carroll

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Rahul@gurome: GMAT Instructor; Posts: 1179; Joined: Sun Apr 11, 2010 9:07 pmFollowed by: 88 members; Location: Milpitas, CA; Thanked: 447 times

by Rahul@gurome » Fri May 28, 2010 5:20 am

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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vikramveer: Senior | Next Rank: 100 Posts; Posts: 30; Joined: Mon Apr 12, 2010 9:00 am; Thanked: 1 times

by vikramveer » Fri May 28, 2010 6:33 am

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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KKGMATTER: Newbie | Next Rank: 10 Posts; Posts: 4; Joined: Sun Apr 25, 2010 1:12 am

by KKGMATTER » Fri May 28, 2010 11:00 pm

Is there a shorter way to solve this problem . I had solved the problem the same way the instructor solved it but took me nearly 2 min 30 sec ehich is too high

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kevincanspain: GMAT Instructor; Posts: 613; Joined: Thu Mar 22, 2007 6:17 amFollowed by: 64 members; Location: madrid; Thanked: 171 times; GMAT Score:790

by kevincanspain » Sat May 29, 2010 12:10 am

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

Under the payment plan, something that costs p ends up costing 0.2p +1.4(0.8)p = 1.32p

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

Kevin Armstrong
GMAT Instructor
Gmatclasses
Madrid

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devp: Junior | Next Rank: 30 Posts; Posts: 14; Joined: Tue Jan 08, 2008 5:48 pm; Thanked: 1 times

by devp » Sun May 30, 2010 12:21 am

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

Finance charges = 0.4 * 0.8 = 32% of original.
So difference in finance charges = 10000 * 32% = 3200
Difference in price = 10000
So total = 13200

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ssgmatter: Legendary Member; Posts: 549; Joined: Wed Jan 06, 2010 7:00 amFollowed by: 3 members; Thanked: 16 times

by ssgmatter » Sun Jun 13, 2010 4:16 am

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).

My question is why do we add 32000 for M/c A and 40000 for M/c B.....Please explain?

Best-
Amit

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Rahul@gurome: GMAT Instructor; Posts: 1179; Joined: Sun Apr 11, 2010 9:07 pmFollowed by: 88 members; Location: Milpitas, CA; Thanked: 447 times

by Rahul@gurome » Sun Jun 13, 2010 5:10 pm

ssgmatter wrote:

My question is why do we add 32000 for M/c A and 40000 for M/c B.....Please explain?

Cost of 2 machines of type A = 2*($20,000) = $40,000
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?

Rahul Lakhani
Quant Expert
Gurome, Inc.
https://www.GuroMe.com
On MBA sabbatical (at ISB) for 2011-12 - will stay active as time permits
1-800-566-4043 (USA)
+91-99201 32411 (India)

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