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Health insurance Plan A requires the insured to pay $1000 or [#permalink]
17 Dec 2010, 07:33

9

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00:00

A

B

C

D

E

Difficulty:

75% (hard)

Question Stats:

57% (02:34) correct
43% (01:58) wrong based on 278 sessions

Health insurance Plan A requires the insured to pay $1000 or 50% of total cost, whichever is lower. Plan B requires the insured to pay the initial $300, but then pays 80% of the cost over $300. Which of the following is a cost level for which both insurance plans pay out the same amount?

Re: Health insurance Plan [#permalink]
17 Dec 2010, 08:04

7

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Expert's post

5

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anilnandyala wrote:

Health insurance Plan A requires the insured to pay $1000 or 50% of total cost, whichever is lower. Plan B requires the insured to pay the initial $300, but then pays 80% of the cost over $300. Which of the following is a cost level for which both insurance plans pay out the same amount?

$600 $1000 $3800 $5300 $6200

Pay out for plan A: Cost-$1,000 or Cost-0.5*Cost=0.5*Cost, when 0.5*Cost<$1,000; Pay out for plan B: 0.8(Cost-$300);

The question is: for which of the following costs the pay outs are the same.

C-1,000=0.8(C-300) --> for C=3,800 and 0.5C=0.8(C-300) --> for C=800. As we have only $3,800 listed then it must be a correct answer.

Or you can use backsolving for this question: A. C=$600: pay out for plan A will be 0.5*600=300 (as 0.5*600<1,000) and pay out for plan B will be 0.8*(600-300)=240;

B. C=$1000: pay out for plan A will be 0.5*1,00=500 (as 0.5*1,000<1,000) and pay out for plan B will be 0.8*(1,000-300)=560;

C. C=$3800: pay out for plan A will be 3,800-1,000=2,800 (as 0.5*3,800>1,000) and pay out for plan B will be 0.8*(3,800-300)=2,800 --> 2,800=2,800;

D. C=$5300: pay out for plan A will be 5,300-1,000=4,300 (as 0.5*5,300>1,000) and pay out for plan B will be 0.8*(5,300-300)=4,000;

E. C=$6200:pay out for plan A will be 6,200-1,000=5,200 (as 0.5*6,200>1,000) and pay out for plan B will be 0.8*(6,200-300)=4,720.

Re: Health insurance Plan [#permalink]
18 Jan 2011, 22:12

Well i think the Ans would be C because i use the same method as the other member showed you above and i don't think there is another way of finding that pay out plan... _________________

Any sufficiently advanced technology is indistinguishable from magic.

Re: Health insurance Plan A requires the insured to pay $1000 or [#permalink]
22 May 2012, 18:54

Hi Bunnel.

According to me the 2 equations are: 0.8(C – 300) + 300= 1000 OR 0.8(C – 300) + 300= 0.5C

But i am confused with the question you formed the two equations

C-1,000=0.8(C-300)--->1^st and 0.5C=0.8(C-300)

Since the questions says if the cost is above 1000 he will pay which ever is lower, but according to your 1st equation he is paying more that 1000 i.e is 2800, please clarify if i am wrong, awaiting for your reply _________________

Re: Health insurance Plan A requires the insured to pay $1000 or [#permalink]
22 May 2012, 19:37

4

This post received KUDOS

kotela wrote:

Hi Bunnel.

According to me the 2 equations are: 0.8(C – 300) + 300= 1000 OR 0.8(C – 300) + 300= 0.5C

But i am confused with the question you formed the two equations

C-1,000=0.8(C-300)--->1^st and 0.5C=0.8(C-300)

Since the questions says if the cost is above 1000 he will pay which ever is lower, but according to your 1st equation he is paying more that 1000 i.e is 2800, please clarify if i am wrong, awaiting for your reply

You are reading the question wrong. It is asking when the insurance company will pay the same amount of money not the insured.

0.8(C–300) = C–1000 OR 0.8(C–300) = 0.5C

Solving the first equation gives us C=3800 Solving the second equation gives us C=800

Since 800 isn't one of the answers we can eliminate it and 3800 is the only possible answer.

Re: Health insurance Plan A requires the insured to pay $1000 or [#permalink]
22 May 2012, 21:19

Cares wrote:

kotela wrote:

Hi Bunnel.

According to me the 2 equations are: 0.8(C – 300) + 300= 1000 OR 0.8(C – 300) + 300= 0.5C

But i am confused with the question you formed the two equations

C-1,000=0.8(C-300)--->1^st and 0.5C=0.8(C-300)

Since the questions says if the cost is above 1000 he will pay which ever is lower, but according to your 1st equation he is paying more that 1000 i.e is 2800, please clarify if i am wrong, awaiting for your reply

You are reading the question wrong. It is asking when the insurance company will pay the same amount of money not the insured.

0.8(C–300) = C–1000 OR 0.8(C–300) = 0.5C

Solving the first equation gives us C=3800 Solving the second equation gives us C=800

Since 800 isn't one of the answers we can eliminate it and 3800 is the only possible answer.

The correct answer is C.

Ya you are i misread the question....thanks for that and +1 kudos for you _________________

Re: Health insurance Plan A requires the insured to pay $1000 or [#permalink]
03 Dec 2013, 06:50

Hello from the GMAT Club BumpBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

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Re: Health insurance Plan A requires the insured to pay $1000 or [#permalink]
22 Mar 2015, 04:33

TooLong150 wrote:

Algebra is truly a loser in this question. Backsolving is the fastest and most effective method here.

Having to rely on backsolving is truly hit or miss when it comes to timing.

If you've mastered algebra, not only can you virtually solve most of the problems on the test, but this problem can also be completed around 30 seconds. Seems like a pretty fast time to me

gmatclubot

Re: Health insurance Plan A requires the insured to pay $1000 or
[#permalink]
22 Mar 2015, 04:33

Harvard asks you to write a post interview reflection (PIR) within 24 hours of your interview. Many have said that there is little you can do in this...