An insurance company has a contract with a medical laboratory to pay a discounted price for a certain...

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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.

OA D

[deloitte247]

Initial bill without discount = $250
A particular price was agreed on in the contract between the insurance company and the medical laboratory and the insurance company?
Question: What is the percent discount specified by the contract between the laboratory and the insurance company?
Statement 1: The insurance group is required to pay only 20 percent of the original bill for the test?
If the insurance company paid 20% of the original bill.
Therefore, total discount % = 100% - 20% = 80% of original bill. So, statement 1 is SUFFICIENT.

Statement 2: The insurance company is required to pay $46 for the test.
If 100% of the bill = $230
The x% of the bill = $46
$$x\%=\frac{100\cdot46}{230}=20$$
Therefore, the insurance company is required to pay only 20%.
=> Discount = 100 - 20 = 80% of original bill.
Therefore statement 2 is SUFFICIENT.

Since each statement alone is SUFFICIENT, then the correct answer is option D.