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05 Nov 2017, 01:54
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Difficulty:

15% (low)

Question Stats:

97% (00:44) correct 3% (00:50) wrong based on 58 sessions

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A motorcycle costs $2,500 when it is brand new. At the end of each year it is worth 80 percent of what it was worth at the beginning of the year. What is the motorcycle worth when it is 3 years old? (A)$1,000
(B) $1,200 (C)$1,280
(D) $1,340 (E)$1,430
[Reveal] Spoiler: OA

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Re: A motorcycle costs $2,500 when it is brand new. At the end of each yea [#permalink] ### Show Tags 05 Nov 2017, 02:05 Bunuel wrote: A motorcycle costs$2,500 when it is brand new. At the end of each year it is worth 80 percent of what it was worth at the beginning of the year. What is the motorcycle worth when it is 3 years old?

(A) $1,000 (B)$1,200
(C) $1,280 (D)$1,340
(E) $1,430 After three years the motor cycle is worth $$(0.8)^3*x$$, if the present price of the motor cycle is x Since the current price of the motor cycle is 2500$, the price after 3 years is $$0.512*2500 = 1280$$$(Option C) _________________ Stay hungry, Stay foolish 2017-2018 MBA Deadlines Class of 2020: Rotman Thread | Schulich Thread Class of 2019: Sauder Thread Kudos [?]: 745 [0], given: 19 VP Joined: 22 May 2016 Posts: 1108 Kudos [?]: 397 [0], given: 640 A motorcycle costs$2,500 when it is brand new. At the end of each yea [#permalink]

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05 Nov 2017, 13:39
Bunuel wrote:
A motorcycle costs $2,500 when it is brand new. At the end of each year it is worth 80 percent of what it was worth at the beginning of the year. What is the motorcycle worth when it is 3 years old? (A)$1,000
(B) $1,200 (C)$1,280
(D) $1,340 (E)$1,430

A brand new motorcycle is worth $2,500. At the end of each year, it is worth 80% of its value from the beginning of that year -- in other words, it loses 20% of its value from the beginning of the year. Calculating the multiplier (.8)$$^3$$, then multiplying that by$2,500 seemed more labor-intensive than just subtracting 20 percent from each year's value. Your mileage may vary.

Year 1: loses 20 percent of $2,500 10% =$250, so 20% = $500 End of year 1: ($2,500 - 500) = $2000 Year 2: loses 20 percent of$2,000
10% = $200, so 20% =$400
End of year 2: ($2,000 - 400) =$1,600

Year 3: loses 20 percent of $1,600 10% =$160, so 20% = $320 End of year 3: ($1,600 - 320) = $1,280 Answer C Kudos [?]: 397 [0], given: 640 Intern Joined: 05 Dec 2016 Posts: 6 Kudos [?]: [0], given: 1 Re: A motorcycle costs$2,500 when it is brand new. At the end of each yea [#permalink]

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06 Nov 2017, 20:07
easy calculation

2500 x 4^3/5^3

= $1280 Kudos [?]: [0], given: 1 Target Test Prep Representative Status: Head GMAT Instructor Affiliations: Target Test Prep Joined: 04 Mar 2011 Posts: 1793 Kudos [?]: 979 [0], given: 5 Re: A motorcycle costs$2,500 when it is brand new. At the end of each yea [#permalink]

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08 Nov 2017, 17:33
Bunuel wrote:
A motorcycle costs $2,500 when it is brand new. At the end of each year it is worth 80 percent of what it was worth at the beginning of the year. What is the motorcycle worth when it is 3 years old? (A)$1,000
(B) $1,200 (C)$1,280
(D) $1,340 (E)$1,430

Noting that 80% = 0.80 = ⅘, we see that after 3 years, the motorcycle is worth:

2,500 x 4/5 x 4/5 x 4/5 = 2,500 x 64/125 = 20 x 64 = $1,280 Answer: C _________________ Jeffery Miller Head of GMAT Instruction GMAT Quant Self-Study Course 500+ lessons 3000+ practice problems 800+ HD solutions Kudos [?]: 979 [0], given: 5 Re: A motorcycle costs$2,500 when it is brand new. At the end of each yea   [#permalink] 08 Nov 2017, 17:33
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