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# A family pays \$800 per year for an insurance plan that pays

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VP
Joined: 08 Jun 2005
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A family pays \$800 per year for an insurance plan that pays [#permalink]

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23 May 2007, 00:59
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A family pays \$800 per year for an insurance plan that pays 80 percent of the first \$1,000 in expenses and 100 percent of all medical expenses thereafter. In any given year, the total amount paid by the family will equal the amount paid by the plan when the family's medical expenses total:

A. \$1,000
B. \$1,200
C. \$1,400
D. \$1,800
E. \$2,200

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Director
Joined: 18 Jul 2006
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23 May 2007, 01:41
Money paid by family = Money paid by insurer.
1000*.2+(X-1000)*0 + 800 = 1000*.8 + (X -1000)
=> X = 1200

so B?

P.S. Here, actual money paid by insurer is 1200 - 800 (received feom family as copay) = 400.
If we take \$800 into consideration, answer should be \$2000, but this is not an answer option.

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Manager
Joined: 14 Mar 2007
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23 May 2007, 01:56
B. 1200

Let the sum be x
Insurance comapny will pay:
0.8*1000 + (x-1000)

Family will pay:
800(towards insurance) + 200(remaining from the first 1000 which insurance does not cover)

So
0.8*1000 + (x-1000) = 800 + 200
800 + x-1000 = 1000
x=1200

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Manager
Joined: 22 May 2007
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23 May 2007, 02:06
I get the same equation, answer B is the correct one

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VP
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23 May 2007, 02:07
the OA is (B) - good work & good explanations !

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Manager
Joined: 13 Feb 2007
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23 May 2007, 23:53
Juaz, that was a good catch on the (x - 1000) part of the equation. I understand after looking at your answer that the first thousand is subtracted from the total because it has already been distributed proportionately and accounted for elsewhere in the equation. Good Job!

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Good job Juaz   [#permalink] 23 May 2007, 23:53
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# A family pays \$800 per year for an insurance plan that pays

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