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At a certain supplier, a machine of type A costs $20,000 and
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Updated on: 30 Mar 2012, 10:39
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At a certain supplier, a machine of type A costs $20,000 and a machine of type B costs $50,000. Each machine can be purchased by making a 20 percent down payment and repaying the remainder of the cost and the finance charges over a period of time.If the finance charges= 40 percent of the rremainderof the cost, how much less would 2 machines of type A cost than 1 machine of type B? A. $10,000 B. $11,200 C. $12,000 D. $12,800 E. $13,200
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Originally posted by EnterMatrix on 17 Jul 2010, 12:41.
Last edited by Bunuel on 30 Mar 2012, 10:39, edited 1 time in total.
Edited the question



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Re: Problem Solving
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17 Jul 2010, 16:50
EnterMatrix wrote: At a certain supplier, a machine of type A costs $20,000 and a machine of type B costs $50,000. Each machine can be purchased by making a 20 percent down payment and repaying the remainder of the cost and the finance charges over a period of time.If the finance charges= 40 percent of the rremainderof the cost, how much less would 2 machines of type A cost than 1 machine of type B?
a. $10,000 b. $11,200 c. $12,000 d. $12,800 e. $13,200 1 machine of type B will cost: 20% down payment of 50,000 = 10,000 plus remaining sum (50,00010,000=40,000) with 40% of finance charges 40,000*1.4=56,000 > 10,000+56,000=66,000; 2 machine of type A will cost: 20% down payment of 2*20,000 = 8,000 plus remaining sum (40,0008,000=32,000) with 40% of finance charges 32,000*1.4=44,800 > 8,000+44,800=52,800; Difference = 66,000  52,800 = 13,200. Answer: E.
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Re: Problem Solving
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17 Jul 2010, 18:10
i got the same answer E as bunuel did...what's the official answer?



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Re: Problem Solving
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18 Jul 2010, 02:20
OA is E...was just considering a 40% of the remaining cost instead of the 1.4 factor..so was stuck!! Thanks...



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Re: Tough GMAT prep PS
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21 Feb 2011, 05:43
2 A type machines cost: 40000. 20% down payment: 40000/5 = 8000 Remainder: 400008000=32000 Financial charges on remainder=32000*40/100=12800 Total money spent for 2 type A's = 12800+8000+32000=52800 1 B type machine cost: 50000 20% down payment: 50000/5=10000 Remainder: 5000010000=40000 Financial charges on remainder=40000*40/100=16000 Total money spent for 1 type B = 16000+10000+40000=66000 Difference: 6600052800=13200 Ans: "E"
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Re: Tough GMAT prep PS
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21 Feb 2011, 19:09
mydreambschool wrote: Hi,
Can someone please explain tough PS question from gmat prep.
Please find screenshot attached in the word doc file.
Many thanks. The cost of 2 machines of type A is 40,000 while the cost of one machine of type B is 50,000. The down payment and rate of interest are the same for both the cases. So all expenses will be same for both the cases except for the extra 10,000 to be paid in case of machine B and extra interest calculated as 40% of 8000 = 3200 (because out of 10,000, 20% down payment is 2000 and rest 8000 is the loaned amount) So we need to pay a total of 13,200 extra in case of machine B.
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Re: Problem Solving
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22 Feb 2011, 12:58
E as well. Although, is it ok to consider total cost at the end of payment period when there is no specific mention abt it?



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Re: Problem Solving
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22 Feb 2011, 14:24
mbafall2011 wrote: E as well. Although, is it ok to consider total cost at the end of payment period when there is no specific mention abt it? Yes, it will be the cost at the end of the period. The question stem says "how much less would 2 machines of type A cost than 1 machine of type B?" Consider this: I want to buy a car  either a Camry or an Accord Camry down payment 20%, 6% interest on rest Accord down payment 15%, 6% interest on rest price of Camry $$$, Price of Accord $$$ etc etc.... How much less would an Accord cost as compared to Camry? It has to be the overall cost.
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Re: At a certain supplier, a machine of type A costs $20,000 and
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27 Jun 2013, 01:27
Why do we multiply by 1.4 and not .4.. Please explain
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Re: At a certain supplier, a machine of type A costs $20,000 and
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27 Jun 2013, 01:46
fozzzy wrote: Why do we multiply by 1.4 and not .4.. Please explain It depends on the numbers you choose. 40% is applicable on the amount not paid already. Thus, you can have : 50000 + 0.4*40000 = 66000 [ We have anyways added the complete cost of the machine i.e. 50000, however, 40% on the amount which was not paid as downpayment is to be added] Or you can have 10000 + 1.4*40000 = 10000+(1+0.4)*40000 = 10000+40000+0.4*40000 = 50000+0.4*40000 ; this is exactly what we have above = 66000[ 50000 can be split in to two amounts; 10000 denotes the downpayment with no interest and the remaining 40000 with an interest of 40%] Either ways, it is the same thing.
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Re: At a certain supplier, a machine of type A costs $20,000 and
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17 Jul 2013, 00:59
Down payment for A 20000 * 20/100 = 4000 Remaining is 20000 4000 = 16000 finance charge for A is 40/100 * 16000 = 6400 Total cost is ( 16000 + 4000 + 6400) = 26400 Since we have 2 machines total cost is 26400 * 2 = 52800 Now for B Down payment is 50000 * 20/100 = 10000 Remainder is (50000  10000) 40000 Finance is on the remainder so 40000 * 40/100 = 16000 Total cost for B is ( 40000 + 10000 + 16000) = 66000 66000  52800 = 13200 Answer is E
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Re: At a certain supplier, a machine of type A costs $20,000 and
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18 Jul 2013, 12:39
A = 40,000 DP = 40,000*(20/100) = 8,000 Remaining = 32,000 F = R*(40/100) F = 32,000*(40/100) = 12,800 C = DP + F + R C = 8,000 + 12,800 + 32,000 C = 52,800
B = 50,000 DP = 50,000*(20/100) = 10,000 R = 40,000 F = 40,000*(40/100) = 16,000 C = 10,000 + 16,000 + 40,000 C = 66,000
66,000  52,800 = 13,200 E



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Re: At a certain supplier, a machine of type A costs $20,000 and
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07 Jul 2015, 18:31
Cost of Machine = Down Payment + Remainder + Remainder*Finance Percent = Machine Cost + Remainder*Finance Percent A=2E4+.8*2E4*.4 = 1.32(2E4) B=5E4 + .8*5E4*.4 = 1.32(5E4) B2A=13200
Once you model the Cost of the Machine, the problem is just arithmetic.



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Re: At a certain supplier, a machine of type A costs $20,000 and
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09 Jul 2016, 02:22
EnterMatrix wrote: At a certain supplier, a machine of type A costs $20,000 and a machine of type B costs $50,000. Each machine can be purchased by making a 20 percent down payment and repaying the remainder of the cost and the finance charges over a period of time.If the finance charges= 40 percent of the remainder of the cost, how much less would 2 machines of type A cost than 1 machine of type B?
A. $10,000 B. $11,200 C. $12,000 D. $12,800 E. $13,200 Okay..I tried to reduce the amount of calculations..here's me take.. After all..how much do we have to pay?
20% down payment done.. we're left with 80%..on which 40% interest is accrued..in other words..112%
Total amount to be paid..in each case..is 112% + 20% = 132% of the actual value
So.. 1.32(50000  2*20000) = 13200 (E).
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Re: At a certain supplier, a machine of type A costs $20,000 and
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11 Dec 2017, 11:30
EnterMatrix wrote: At a certain supplier, a machine of type A costs $20,000 and a machine of type B costs $50,000. Each machine can be purchased by making a 20 percent down payment and repaying the remainder of the cost and the finance charges over a period of time.If the finance charges= 40 percent of the rremainderof the cost, how much less would 2 machines of type A cost than 1 machine of type B?
A. $10,000 B. $11,200 C. $12,000 D. $12,800 E. $13,200 We are given that a machine of type A costs $20,000, and that a machine of type B costs $50,000. We are also given that each machine can be purchased by making a 20 percent down payment and repaying the remainder of the cost and the finance charges over a period of time. We need to determine the difference in cost between 2 machines of type A and 1 machine of type B. Let’s determine the cost, with finance charges, of 1 machine of type A. Down payment = 20,000 x 0.2 = 4,000 Remainder = 20,000  4,000 = 16,000 Since the remainder of the cost is 16,000, the finance charge is 0.4 x 16,000 = 6,400. Thus, machine A would cost 20,000 + 6,400 = 26,400, and two machines of type A would cost 26,400 x 2 = 52,800. Now we can calculate the cost, with finance charges, of 1 machine of type B. Down payment = 50,000 x 0.2 = 10,000 Remainder = 50,000  10,000 = 40,000 Since the remainder of the cost is 40,000, the finance charge is 0.4 x 40,000 = 16,000. Thus, 1 machine of type B would cost 50,000 + 16,000 = 66,000. The difference in cost between 2 machines of type A and 1 machine of type B is: 66,000  52,800 = 13,200 Answer: E
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