Jim needs $1,000 to buy a new flat-screen TV. Since he has : GMAT Problem Solving (PS) Check GMAT Club Decision Tracker for the Latest School Decision Releases http://gmatclub.com/AppTrack  It is currently 16 Jan 2017, 12:40 ### GMAT Club Daily Prep #### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email. Customized for You we will pick new questions that match your level based on your Timer History Track Your Progress every week, we’ll send you an estimated GMAT score based on your performance Practice Pays we will pick new questions that match your level based on your Timer History #### Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here. ### Request Expert Reply # Events & Promotions ###### Events & Promotions in June Open Detailed Calendar # Jim needs$1,000 to buy a new flat-screen TV. Since he has

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Jim needs $1,000 to buy a new flat-screen TV. Since he has [#permalink] ### Show Tags 09 Sep 2013, 01:29 1 This post was BOOKMARKED 00:00 Difficulty: (N/A) Question Stats: 88% (03:33) correct 12% (01:37) wrong based on 138 sessions ### HideShow timer Statistics Jim needs$1,000 to buy a new flat-screen TV. Since he has only $7, he borrows the remaining balance from his sister Mary. The loan will be repaid in 3 annual installments at an interest rate of 10%, compounded annually. The formula for calculating the monthly payment P is P = (L x C x r) / (C – 1) where L = amount of the loan, r = annual interest rate, and C = compounding factor = (1 + r)^N where N = number of annual payments. How much does Jim have to pay Mary at the end of each of the next 3 years (rounded to the nearest penny)? A.$357.67
B. $375.85 C.$387.40
D. $399.30 E.$433.33

Any idea how to solve this ?
I don't know the answer

Last edited by Bunuel on 09 Sep 2013, 02:11, edited 1 time in total.
Renamed the topic, edited the question and moved to PS forum.
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Re: Jim needs $1,000 to buy a new flat-screen TV. Since he has [#permalink] ### Show Tags 09 Sep 2013, 04:20 1 This post received KUDOS BugDGmat wrote: Jim needs$1,000 to buy a new flat-screen TV. Since he has only $7, he borrows the remaining balance from his sister Mary. The loan will be repaid in 3 annual installments at an interest rate of 10%, compounded annually. The formula for calculating the monthly payment P is P = (L x C x r) / (C – 1) where L = amount of the loan, r = annual interest rate, and C = compounding factor = (1 + r)^N where N = number of annual payments. How much does Jim have to pay Mary at the end of each of the next 3 years (rounded to the nearest penny)? A.$357.67
B. $375.85 C.$387.40
D. $399.30 E.$433.33

Any idea how to solve this ?
I don't know the answer

L = 993
r = 0.1
C = 1.1^3 = 1.331
Insert all of these in the formula and we get
P = 993*1.331*0.1/0.331

In order to resolve above without a calc, we need to find the approx value of 0.1331/0.331 ~ 0.4~
~ 993*0.4
~ 397

Answer D should be the one.
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Re: Jim needs $1,000 to buy a new flat-screen TV. Since he has [#permalink] ### Show Tags 10 Sep 2013, 00:22 BugDGmat wrote: Jim needs$1,000 to buy a new flat-screen TV. Since he has only $7, he borrows the remaining balance from his sister Mary. The loan will be repaid in 3 annual installments at an interest rate of 10%, compounded annually. The formula for calculating the monthly payment P is P = (L x C x r) / (C – 1) where L = amount of the loan, r = annual interest rate, and C = compounding factor = (1 + r)^N where N = number of annual payments. How much does Jim have to pay Mary at the end of each of the next 3 years (rounded to the nearest penny)? A.$357.67
B. $375.85 C.$387.40
D. $399.30 E.$433.33

Any idea how to solve this ?
I don't know the answer

Similar question to practice: louie-takes-out-a-three-month-loan-of-1000-the-lender-101506.html
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Re: Jim needs $1,000 to buy a new flat-screen TV. Since he has [#permalink] ### Show Tags 07 May 2016, 13:01 BugDGmat wrote: Jim needs$1,000 to buy a new flat-screen TV. Since he has only $7, he borrows the remaining balance from his sister Mary. The loan will be repaid in 3 annual installments at an interest rate of 10%, compounded annually. The formula for calculating the monthly payment P is P = (L x C x r) / (C – 1) where L = amount of the loan, r = annual interest rate, and C = compounding factor = (1 + r)^N where N = number of annual payments. How much does Jim have to pay Mary at the end of each of the next 3 years (rounded to the nearest penny)? A.$357.67
B. $375.85 C.$387.40
D. $399.30 E.$433.33

Any idea how to solve this ?
I don't know the answer

EMI can be calculated by the formula

EMI = (P* R) /[1 - (100/100+R)^n]

Where P is principal, R is interest, n is number of installments.

In this case,

EMI = (993 *10/100)/[1-(10000/11000)^3] = (99.30)/[1 - (1000/1331)] =99.30/331/1331 = 1331*0.3 = 399.30

Hence answer is D
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