prep question

[jamesk486]

Under a certain company's medical insurance plan, the amount an employee must pay for medical expenses consists of payment of the first $450 of expenses plus 20% of additional expenses, up to a maximum total payment of $1,350 per year. All remaining expenses are paid by the plan. Last year, if an employee paid the maximum amount for medical expenses, what is the last amount that the plan could have paid?
(A) $720
(B) $1080
(C) $3600
(D) $4500
(E) $4950

[mschling52]

Is the answer C - 3600?

Set up an equation for the amount paid by the employee

P = 450 + 0.2x,

where x is the loss amount above $450. Then set this equation equal to the maximum employee payment to figure out the value of x required for the employee to max out his payments

450 + 0.2x = 1350
0.2x = 900
x = 4500

So we know that there must be a loss of $4500 for the employee to max out his payment. In this case, the plan would pay 80% of losses over $450, so

0.8 * x = 0.8 * 4500 = $3600.

[zozo123]

1350-450 = 900

900$ = 20% then the 80% are paid by the plan.
(900/0.2) * 0.8 = 3600$


=> Answer C

[f2001290]

One more for C

[800GMAT]

450 + 0.2x =1350

the insurance will pay 80% of x

solving for x and substituting in 0.8x
= 3600

C