Author 
Message 
TAGS:

Hide Tags

Math Expert
Joined: 02 Sep 2009
Posts: 49915

A professional athlete was offered a threeyear contract to play with
[#permalink]
Show Tags
01 Feb 2018, 00:48
Question Stats:
82% (03:03) correct 18% (02:04) wrong based on 28 sessions
HideShow timer Statistics
A professional athlete was offered a threeyear contract to play with Team K that provided for an annual salary of $100,000 in the first year, an increase in annual salary of 20% over the previous year for the next two years, and a bonus of $50,000 on signing. Team L offered a threeyear contract providing for an annual salary of $150,000 in the first year, an increase in annual salary of 10% over the previous year for the next two years, and no signing bonus. If he accepts the offer of Team L and fulfills the threeyear contract terms, the athlete will receive how much more money by choosing Team L over Team if? (A) $32,500 (B) $50,000 (C) $82,500 (D) $92,000 (E) $100,000
Official Answer and Stats are available only to registered users. Register/ Login.
_________________
New to the Math Forum? Please read this: Ultimate GMAT Quantitative Megathread  All You Need for Quant  PLEASE READ AND FOLLOW: 12 Rules for Posting!!! Resources: GMAT Math Book  Triangles  Polygons  Coordinate Geometry  Factorials  Circles  Number Theory  Remainders; 8. Overlapping Sets  PDF of Math Book; 10. Remainders  GMAT Prep Software Analysis  SEVEN SAMURAI OF 2012 (BEST DISCUSSIONS)  Tricky questions from previous years.
Collection of Questions: PS: 1. Tough and Tricky questions; 2. Hard questions; 3. Hard questions part 2; 4. Standard deviation; 5. Tough Problem Solving Questions With Solutions; 6. Probability and Combinations Questions With Solutions; 7 Tough and tricky exponents and roots questions; 8 12 Easy Pieces (or not?); 9 Bakers' Dozen; 10 Algebra set. ,11 Mixed Questions, 12 Fresh Meat DS: 1. DS tough questions; 2. DS tough questions part 2; 3. DS tough questions part 3; 4. DS Standard deviation; 5. Inequalities; 6. 700+ GMAT Data Sufficiency Questions With Explanations; 7 Tough and tricky exponents and roots questions; 8 The Discreet Charm of the DS; 9 Devil's Dozen!!!; 10 Number Properties set., 11 New DS set.
What are GMAT Club Tests? Extrahard Quant Tests with Brilliant Analytics



Intern
Joined: 27 Aug 2016
Posts: 15

Re: A professional athlete was offered a threeyear contract to play with
[#permalink]
Show Tags
01 Feb 2018, 01:14
I go with Answer. C
Team K First Year: 100K + 50K Second Year: 120K Third Year: 144k
Total: 414K
Team L First Year: 150K Second Year: 165K Third Year: 181.5K
Total: 496.K
Difference: 82.5K
Hence Answer C.



Intern
Joined: 03 Jun 2015
Posts: 21
WE: Information Technology (Computer Software)

Re: A professional athlete was offered a threeyear contract to play with
[#permalink]
Show Tags
01 Feb 2018, 02:20
Bunuel wrote: A professional athlete was offered a threeyear contract to play with Team K that provided for an annual salary of $100,000 in the first year, an increase in annual salary of 20% over the previous year for the next two years, and a bonus of $50,000 on signing. Team L offered a threeyear contract providing for an annual salary of $150,000 in the first year, an increase in annual salary of 10% over the previous year for the next two years, and no signing bonus. If he accepts the offer of Team L and fulfills the threeyear contract terms, the athlete will receive how much more money by choosing Team L over Team if?
(A) $32,500
(B) $50,000
(C) $82,500
(D) $92,000
(E) $100,000 Renumeration offered by : Team K : 100,000 + 1.2*100,000 +1.2* 1.2*100,000 + 50,000 = 100,000(1+1.2+1.44+0.5)= 100,000*4.14 = 414,000 (1) Team L : 150,000 + 1.1*150,000 + 1.1*1.1*150,000 = 150,000(1+1.1+1.21) = 150,000*3.31= 496500 (2) Answer = (2)  (1) = 496500414000 = 825000 Answer is C.
_________________
A dream doesn't become reality through magic; it takes sweat, determination and hard work.



Director
Joined: 09 Mar 2016
Posts: 940

A professional athlete was offered a threeyear contract to play with
[#permalink]
Show Tags
Updated on: 01 Feb 2018, 10:47
Bunuel wrote: A professional athlete was offered a threeyear contract to play with Team K that provided for an annual salary of $100,000 in the first year, an increase in annual salary of 20% over the previous year for the next two years, and a bonus of $50,000 on signing. Team L offered a threeyear contract providing for an annual salary of $150,000 in the first year, an increase in annual salary of 10% over the previous year for the next two years, and no signing bonus. If he accepts the offer of Team L and fulfills the threeyear contract terms, the athlete will receive how much more money by choosing Team L over Team if?
(A) $32,500
(B) $50,000
(C) $82,500
(D) $92,000
(E) $100,000 Ok, GMAT quant party starts here A professional athlete was offered a threeyear contract to play with Team K that provided for an annual salary of $100,000 in the first year, an increase in annual salary of 20% over the previous year for the next two years, and a bonus of $50,000 on signing Hello! Yes, you ! please read below and correct my mistake! i am using formula , and exponent meant number of years x = \(100, 000 (1+0,20)^2\) x = 100,000*1.44 = 144,000 +bonus 50,000 = 194,000 x = \(150,000 (1+0,1)^2\) x = 150,000 * 1,21 x= 181,500 194,000  181,500 = 12,500 so why this formula doesnt work ?
Originally posted by dave13 on 01 Feb 2018, 10:44.
Last edited by dave13 on 01 Feb 2018, 10:47, edited 1 time in total.



Director
Joined: 09 Mar 2016
Posts: 940

Re: A professional athlete was offered a threeyear contract to play with
[#permalink]
Show Tags
01 Feb 2018, 10:46
dave13 wrote: Bunuel wrote: A professional athlete was offered a threeyear contract to play with Team K that provided for an annual salary of $100,000 in the first year, an increase in annual salary of 20% over the previous year for the next two years, and a bonus of $50,000 on signing. Team L offered a threeyear contract providing for an annual salary of $150,000 in the first year, an increase in annual salary of 10% over the previous year for the next two years, and no signing bonus. If he accepts the offer of Team L and fulfills the threeyear contract terms, the athlete will receive how much more money by choosing Team L over Team if?
(A) $32,500
(B) $50,000
(C) $82,500
(D) $92,000
(E) $100,000 Ok, GMAT quant party starts here Hello! Yes, you ! please read below and correct my mistake! i am using formula , and exponent meant number of years x = \(100, 000 (1+0,20)^2\) x = 100,000*1.44 = 144,000 +bonus 50,000 = 194,000 x = \(150,000 (1+0,1)^2\) x = 150,000 * 1,21 x= 181,500 194,000  181,500 = 12,500 so why this formula doesnt work ?



Senior SC Moderator
Joined: 22 May 2016
Posts: 2033

A professional athlete was offered a threeyear contract to play with
[#permalink]
Show Tags
01 Feb 2018, 18:04
dave13 wrote: dave13 wrote: Bunuel wrote: A professional athlete was offered a threeyear contract to play with Team K that provided for an annual salary of $100,000 in the first year, an increase in annual salary of 20% over the previous year for the next two years, and a bonus of $50,000 on signing. Team L offered a threeyear contract providing for an annual salary of $150,000 in the first year, an increase in annual salary of 10% over the previous year for the next two years, and no signing bonus. If he accepts the offer of Team L and fulfills the threeyear contract terms, the athlete will receive how much more money by choosing Team L over Team if?
(A) $32,500
(B) $50,000
(C) $82,500
(D) $92,000
(E) $100,000 Ok, GMAT quant party starts here Hello! Yes, you ! please read below and correct my mistake! i am using formula , and exponent meant number of years x = \(100, 000 (1+0,20)^2\) x = 100,000*1.44 = 144,000 +bonus 50,000 = 194,000 x = \(150,000 (1+0,1)^2\) x = 150,000 * 1,21 x= 181,500 194,000  181,500 = 12,500 so why this formula doesnt work ? Hi dave13 , Well, the formula didn't work because you calculated only his Year 3 salary (correctly, I might add). You have to add the money he makes in Year 1 and Year 2. Let's use Team K's deal. You calculated Year 3 correctly: $144,000 You have to add Year 1 = 100,000 Year 2 = 120,000 (= 100,000 * 1.2) Year 3 = 144,000 (=100,00*1.44 OR 120,000*1.2) Bonus = 50,000  TOTAL = $414,000 for Team K's deal Now do the same for Team L Year 1: Year 2: >(=150,000 * ____) Year 3: $181,500 (= 150,000 * 1.21) You've calculated a final amount FOR YEAR 3 based on accrued "interest" (really, just a percent increase) on initial salary  but compounding interest, while cumulative, is not "additive" in the sense it needs to be here. Hope that helps.
_________________
The only thing more dangerous than ignorance is arrogance.  Albert Einstein



Target Test Prep Representative
Status: Founder & CEO
Affiliations: Target Test Prep
Joined: 14 Oct 2015
Posts: 3825
Location: United States (CA)

Re: A professional athlete was offered a threeyear contract to play with
[#permalink]
Show Tags
02 Feb 2018, 12:19
Bunuel wrote: A professional athlete was offered a threeyear contract to play with Team K that provided for an annual salary of $100,000 in the first year, an increase in annual salary of 20% over the previous year for the next two years, and a bonus of $50,000 on signing. Team L offered a threeyear contract providing for an annual salary of $150,000 in the first year, an increase in annual salary of 10% over the previous year for the next two years, and no signing bonus. If he accepts the offer of Team L and fulfills the threeyear contract terms, the athlete will receive how much more money by choosing Team L over Team if?
(A) $32,500
(B) $50,000
(C) $82,500
(D) $92,000
(E) $100,000 Let’s first determine the contract for Team K. 100,000 + 1.2(100,000) + 1.2 x 1.2(100,000) + 50,000 150,000 + 120,000 + 144,000 = 414,000 Let’s now determine the contract for team L. 150,000 + 1.1(150,000) + 1.1 x 1.1(150,000) 150,000 + 165,000 + 181,500 = 496,500 Thus, the difference is 496,500  414,000 = 82,500. Answer: C
_________________
Scott WoodburyStewart
Founder and CEO
GMAT Quant SelfStudy Course
500+ lessons 3000+ practice problems 800+ HD solutions




Re: A professional athlete was offered a threeyear contract to play with &nbs
[#permalink]
02 Feb 2018, 12:19






