An insurance company has a contract with a medical

[BTGmoderatorLU]

Source: GMAT Prep

An insurance company has a contract with a medical laboratory to pay a discounted price for a certain medical test performed on patients referred to the laboratory by the insurance company. If the laboratory's original bill for this medical test on a patient referred by the insurance company is $230, what is the percent discount specified by the contract between the laboratory and the insurance company?

1) The insurance company is required to pay only 20 percent of the original bill for the test.
2) The insurance company is required to pay $46 for the test.

The OA is D

[Jay@ManhattanReview]

Source: GMAT Prep

An insurance company has a contract with a medical laboratory to pay a discounted price for a certain medical test performed on patients referred to the laboratory by the insurance company. If the laboratory's original bill for this medical test on a patient referred by the insurance company is $230, what is the percent discount specified by the contract between the laboratory and the insurance company?

1) The insurance company is required to pay only 20 percent of the original bill for the test.
2) The insurance company is required to pay $46 for the test.

The OA is D

Let's take each statement one by one.

1) The insurance company is required to pay only 20 percent of the original bill for the test.

Since the company pays 20% of the bill, the discount percent = 80%. Sufficient.

2) The insurance company is required to pay $46 for the test.

Percent discount = [(230 - 46) / 230]*100% = 80%. Sufficient.

The correct answer: D

Hope this helps!

-Jay
_________________
Manhattan Review GMAT Prep

Locations: GMAT Classes Oxford | GMAT Prep Courses Bangalore | LSAT Prep Courses Atlanta | Manhattan SAT | and many more...

Schedule your free consultation with an experienced GMAT Prep Advisor! Click here.

[swerve]

The percent discount (specified by the contract) will dictate the amount the insurance company has to pay for each transaction. For instance, if the discount was 10%, the insurance company will be liable to pay $207 (230-23) out of $230. Essentially, if you can find out how much the insurance company has to pay out of the sum of $230, you can calculate the discount.

Statement (1) Company pays \(20%\). This implies the company enjoys \(80%\) discount. Sufficient

Statement (2) Company pays $46. Discount \(=\frac{230-46}{230}*100\). Sufficient

Both the statements are sufficient \(\Rightarrow\) __D__