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M08#17

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Senior Manager
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M08#17 [#permalink] New post 02 Jan 2012, 14:00
Two payment schemes are available for customers in the N'K store. The first scheme includes a downpayment of 20% of the purchase price and 10 monthly payments of 10% each. The second includes a downpayment of 10% and 20 monthly payments of 8% each. If a customer buys a TV for $216, by what percent will he find the first scheme cheaper than the second (approximately)?

(A) 14%
(B) 27%
(C) 30%
(D) 34%
(E) 35%

How to calculate Cost of scheme mentioned in the discussion http://gmatclub.com/forum/payments-algebra-m08q17-57654.html?kudos=1 by HongHu .

Thanks
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Re: M08#17 [#permalink] New post 02 Jan 2012, 16:31
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Hi, there! I'm happy to help with this. :

First scheme:

20% of 216 = (0.20)(216) = $43.20
10% of 216 = (0.10)(216) = $21.60

Cost = (20% DP) + 10*(10% MP) = 43.20 + 10*21.6 = $259.20

Second scheme

8% of 216 = (0.08)(216) = $17.28

Cost = (10% DP) + 20*(8% MP) = 21.60 + 20*17.28 = $367.20

"By what percent will he find the first scheme cheaper than the second?" The second one (following the word "than") is the whole, and the first one is the part.

Percent = (part/whole)*100 = (259.20/367.20)*100 = 70.588%

The first scheme is 70.588% of the second scheme, so it is 100 - 70.588 = 29.41 = approx. 30%

Does that make it clear from whence all the numbers come? Please let me know if you have any questions.

Mike :)
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Re: M08#17 [#permalink] New post 02 Jan 2012, 16:48
Thanks Mike !!! I made mistake in calculation... :(((
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Re: M08#17   [#permalink] 02 Jan 2012, 16:48
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