GMAT Question of the Day - Daily to your Mailbox; hard ones only

 It is currently 15 Jan 2019, 20:31

### 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

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

## Events & Promotions

###### Events & Promotions in January
PrevNext
SuMoTuWeThFrSa
303112345
6789101112
13141516171819
20212223242526
272829303112
Open Detailed Calendar
• ### \$450 Tuition Credit & Official CAT Packs FREE

January 15, 2019

January 15, 2019

10:00 PM PST

11:00 PM PST

EMPOWERgmat is giving away the complete Official GMAT Exam Pack collection worth \$100 with the 3 Month Pack (\$299)
• ### The winning strategy for a high GRE score

January 17, 2019

January 17, 2019

08:00 AM PST

09:00 AM PST

Learn the winning strategy for a high GRE score — what do people who reach a high score do differently? We're going to share insights, tips and strategies from data we've collected from over 50,000 students who used examPAL.

# An insurance company sells only one type of health and one type of

Author Message
TAGS:

### Hide Tags

Math Expert
Joined: 02 Sep 2009
Posts: 52108
An insurance company sells only one type of health and one type of  [#permalink]

### Show Tags

01 Nov 2015, 08:23
1
3
00:00

Difficulty:

45% (medium)

Question Stats:

69% (02:14) correct 31% (01:52) wrong based on 207 sessions

### HideShow timer Statistics

An insurance company sells only one type of health and one type of life insurance policy. The monthly premium for a health insurance policy is \$80. If the insurance company took in a total \$5000 in premiums, what was the monthly premium of a life insurance policy?

(1) The total revenue from health insurance premiums was 4/5 of the total revenue the company received from premiums.

(2) The insurance company sold 2.5 times as many health insurance policies as life insurance policies.

Kudos for a correct solution.

_________________
CEO
Joined: 11 Sep 2015
Posts: 3318
Re: An insurance company sells only one type of health and one type of  [#permalink]

### Show Tags

01 Nov 2015, 08:26
Bunuel wrote:
An insurance company sells only one type of health and one type of life insurance policy. The monthly premium for a health insurance policy is \$80. If the insurance company took in a total \$5000 in premiums, what was the monthly premium of a life insurance policy?

(1) The total revenue from health insurance premiums was 4/5 of the total revenue the company received from premiums.

(2) The insurance company sold 2.5 times as many health insurance policies as life insurance policies.

Kudos for a correct solution.

Let H = the number of health insurance policies
Let L = the number of life insurance policies
Let p = the monthly premium on a life insurance policy

So, 80H + pL = 5000

Target question: What is the value of p?

Statement 1: The total revenue from health insurance premiums was 4/5 of the total revenue the company received from premiums.
Total revenue = \$5000
(4/5)(\$5000) = \$4000
So, 80H = \$4000.
Take 80H + pL = 5000 and replace 80H with \$4000 to get 4000 + pL = 5000, which simplifies to pL = 1000
Since there are many possible values for p that satisfy this equation, statement 1 is NOT SUFFICIENT

Statement 2: The insurance company sold 2.5 times as many health insurance policies as life insurance policies.
In other words, H = 2.5L
Take 80H + pL = 5000 and replace H with 2.5L to get 80(2.5L) + pL = 5000, which simplifies to be 200L + pL = 5000
Since there are many possible values for p that satisfy this equation, statement 2 is NOT SUFFICIENT

Statements 1 and 2 combined
From the two statements we get two equations:
200L + pL = 5000
pL = 1000
Subtract the bottom equation from the top equation to get: 200L = 4000, which means L = 20
Now that we know L = 20 and pL = 1000, we can see that p = 50
Since we can answer the target question with certainty, the combined statements are SUFFICIENT

Cheers,
Brent
_________________

Test confidently with gmatprepnow.com

Verbal Forum Moderator
Status: Greatness begins beyond your comfort zone
Joined: 08 Dec 2013
Posts: 2165
Location: India
Concentration: General Management, Strategy
Schools: Kelley '20, ISB '19
GPA: 3.2
WE: Information Technology (Consulting)
Re: An insurance company sells only one type of health and one type of  [#permalink]

### Show Tags

01 Nov 2015, 10:32
Let h= number of health insurance policies
l= number of life insurance policies
L= monthly premium on a life insurance policies

80 h + Ll = 5000
We need to find the value of L

1.
80h = 4000
Ll = 1000
Not sufficient

2. h=2.5l
80*2.5l +Ll = 5000
=> 200l +Ll = 5000
Not sufficient

Combining 1 and 2, we get
200l=4000
=>l=20

L= 50

Sufficient.
_________________

When everything seems to be going against you, remember that the airplane takes off against the wind, not with it. - Henry Ford
The Moment You Think About Giving Up, Think Of The Reason Why You Held On So Long
+1 Kudos if you find this post helpful

Board of Directors
Joined: 17 Jul 2014
Posts: 2601
Location: United States (IL)
Concentration: Finance, Economics
GMAT 1: 650 Q49 V30
GPA: 3.92
WE: General Management (Transportation)
Re: An insurance company sells only one type of health and one type of  [#permalink]

### Show Tags

01 Nov 2015, 11:43
1 -> 80H = 4/5 * 5000 or 80H = 4000. H = 50. Can't Find L.
2 -> H = 2.5L
write 2.5L*80 +xL = 5000
20L+xL = 5000
L(20+x) = 5000
don't have X.
both ->
L(20+x) = 5000
H = 50.
2.5L = 50, and L = 20.
now we have 40L = 5000. we can solve for L.
Manager
Joined: 10 Apr 2015
Posts: 70
Location: India
Concentration: Healthcare, Strategy
GMAT 1: 680 Q49 V34
GPA: 2.4
WE: Marketing (Health Care)
Re: An insurance company sells only one type of health and one type of  [#permalink]

### Show Tags

01 Nov 2015, 21:57
Hi,

Statement 1: We arrive at H = 5000/180 - Not sufficient
Statement 2: Only relation is provided. - Not sufficient

Now using 1 and 2, we arrive at the Value of L.

Option C.

Regards
Manager
Status: One Last Shot !!!
Joined: 04 May 2014
Posts: 239
Location: India
Concentration: Marketing, Social Entrepreneurship
GMAT 1: 630 Q44 V32
GMAT 2: 680 Q47 V35
Re: An insurance company sells only one type of health and one type of  [#permalink]

### Show Tags

03 Nov 2015, 21:28
GMATPrepNow wrote:
Bunuel wrote:
An insurance company sells only one type of health and one type of life insurance policy. The monthly premium for a health insurance policy is \$80. If the insurance company took in a total \$5000 in premiums, what was the monthly premium of a life insurance policy?

(1) The total revenue from health insurance premiums was 4/5 of the total revenue the company received from premiums.

(2) The insurance company sold 2.5 times as many health insurance policies as life insurance policies.

Kudos for a correct solution.

Let H = the number of health insurance policies
Let L = the number of life insurance policies
Let p = the monthly premium on a life insurance policy

So, 80H + pL = 5000

Target question: What is the value of p?

Statement 1: The total revenue from health insurance premiums was 4/5 of the total revenue the company received from premiums.
Total revenue = \$5000
(4/5)(\$5000) = \$4000
So, 80H = \$4000.
Take 80H + pL = 5000 and replace 80H with \$4000 to get 4000 + pL = 5000, which simplifies to pL = 1000
Since there are many possible values for p that satisfy this equation, statement 1 is NOT SUFFICIENT

Statement 2: The insurance company sold 2.5 times as many health insurance policies as life insurance policies.
In other words, H = 2.5L
Take 80H + pL = 5000 and replace H with 2.5L to get 80(2.5L) + pL = 5000, which simplifies to be 200L + pL = 5000
Since there are many possible values for p that satisfy this equation, statement 2 is NOT SUFFICIENT

Statements 1 and 2 combined
From the two statements we get two equations:
200L + pL = 5000
pL = 1000
Subtract the bottom equation from the top equation to get: 200L = 4000, which means L = 20
Now that we know L = 20 and pL = 1000, we can see that p = 50
Since we can answer the target question with certainty, the combined statements are SUFFICIENT

Cheers,
Brent

Hi,
I have a doubt in the explanations provided. I see all have arrived at C with only taking these three variables into account

Let H = the number of health insurance policies
Let L = the number of life insurance policies
Let p = the monthly premium on a life insurance policy

But what about the number of months? Should that not be considered?
The question says that "If the insurance company took in a total \$5000 in premiums". But in how many months?? (How can we assume that this total is for one month?)

Therefore,
80H will represent premium collected from H policies for 1 month and not for all the months. Similarly Lp.
IMO, the equation should be something like this-
80*H*M1 + L*p*M2 = 5000

where, M1=number of months for which premium was collected for health insurance policies
M2=number of months for which premium was collected for life insurance policies

Thanks!
_________________

One Kudos for an everlasting piece of knowledge is not a bad deal at all...

------------------------------------------------------------------------------------------------------------------------
Twenty years from now you will be more disappointed by the things you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.
-Mark Twain

Non-Human User
Joined: 09 Sep 2013
Posts: 9406
Re: An insurance company sells only one type of health and one type of  [#permalink]

### Show Tags

31 Mar 2017, 03:53
Hello from the GMAT Club BumpBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
_________________
Re: An insurance company sells only one type of health and one type of &nbs [#permalink] 31 Mar 2017, 03:53
Display posts from previous: Sort by