Beth's bank charges a service fee on a regular checking account for ea

Question

Beth's bank charges a service fee on a regular checking account for each month in which the balance on the account falls below $100 at any time during the month. Did the bank charge a service fee on Beth's regular checking account last month?

(1) During last month, a total of $1,000 was withdrawn from Beth's regular checking account.

(2) At the beginning of last month, Beth's regular checking account balance was $500.

Bunuel · Accepted Answer

This is a perfect example of how the GMAT tries to trick us. Remember, don’t assume anything that isn’t explicitly stated. Do we know if Beth made any deposits last month? No! Since there's no information about any deposits, the answer is clearly E.

Bunuel · Answer

I guess answer should be E, as no information is given about the depositing.

ugimba · Answer

thanks for the response, but can we assume/take deposit into consideration? I was confused wheather to consider deposit or not, so I decided not to and picked different answer, which was wrong. The given asnwer is E though..

can you write more about such kind of problems ..? this is GPrep question though..

mydreammba · Answer

Beth's bank charges a service fee on a regular checking account for each month in which the balance on the account falls below 100$ at any time during the month, did the bank charge a service fee on Beth's regular checking account last month?

1. During last month, a total of 1000$ was withdrawn from Beth's regular checking account.

2. At the beginning of last month Beth's regular checking account balance was $500

I thought because we don't know when exactly the balance was viewed, because there is no date in particular, and the cash might be withdrawn before viewing the balance, during which there will be no service charge or there will be a service charge if the balance was viewed after withdrawing.........

Is this because of above reason the answer is E???Please help

rboots · Answer

My reasoning, fwiw...

1) During last month, a total of $1000 was withdrawn from the account. However, neither that nor the stem tells us what Beth started the month with. So #1 is insufficient.

2) At the beginning of the month, the account started with $500. Well, that's helpful, but that by itself doesn't tell us anything about withdrawals. So #2 is insufficient.

#1 and #2 tell us what she started the month with and how much was withdrawn during the month, but we don't know if there were deposits made during the course of the month. So I'd answer E.

paragpha · Answer

question stem: anytime the bal falls below 100, it triggers a service fee. 
(1) 1000 withdrawn. INSUFF as we do not know the balance as well as if any amount is deposited.
(2) Opening balance 500. INSUFF as we do not know withdrawal.

(Together) opening balance = 500 and withdrawal = 1000 but we still dont know if any deposit was made to counter the withdrawal. INSUFF.

So E

smallapple · Answer

Hi Bunuel,

The official answer is E. This is my reasoning. Please advise if I am wrong. Thank you.

(1) What we only know is how much money is subtracted from the account, but we don’t know the beginning balance, so it is INSUFFICIENT to know whether Beth need pay for service fee.
(2) What we only know is the beginning balance of the account, but we don’t know the transactions during the month, so it is also INSUFFICIENT.
(3) What we know is the a) beginning balance and b) total withdrawal, but please note that the total withdrawal doesn’t mean that the amount is subtracted at ONE time, and we don’t know how many times and the amount Beth made the deposit, either. So with (1) and (2) it is still INSUFFICIENT.

p2bhokie · Answer

This is a nice question, but I am surprised that it is a 600-700 range question. First when I saw this question I thought it must be from the 700+ bucket...Awesome Explanation Bunuel...I solved it the same way using critical reasoning technique. Statement 1 does not tell us anything about the account balance after the money was withdrawn. Statement 2 only gives the information about the account balance at the start of the month. But the question stem says that the bank charges service fees if the account balance falls below $100  "at any time"  . We don't really know what happened to the account throughout the month - were there any deposits or any additional withdrawals. Hence Statement 1 & 2 combined does not fetch us any useful information. Answer is a def 'E'.

maris2017700 · Answer

I think this question is not serious. although the banking accounts depositing and withdrawing in common sense, but the question does not refers like that. As the question, no one know whether the customer can deposits and withdraw as many times as they can.

amanvermagmat · Answer

Exactly, we dont know whether there were any other transactions or not. There might have been deposits or might not. We cannot assume. Hence we dont know whether her balance goes below $100 or not. So information is not sufficient. Thats why answer is E.

praneethuddagiri · Answer

Yes, the answer is E since it doesn't provide any information about deposits. And also if deposits are mentioned still it is tricky to figure out if at any time the balance fell below $100

BrentGMATPrepNow · Answer

Target question :    Did the bank charge a service fee on Beth's regular checking account last month?

REPHRASED target question :    Did Beth's balance ever go below $100?

Statement 1 : During last month, a total of $1,000 was withdrawn from Beth's regular checking account.   
Were given no information about her starting balance, so we can't say whether or not Beth's balance went below $100 
INSUFFICIENT

Statement 2 : At the beginning of last month, Beth's regular checking account balance was $500.  
Were given no information about how much money Beth withdrew over the month, so we can't say whether or not Beth's balance went below $100 
INSUFFICIENT

Statements 1 and 2 combined    
Here are two CONTRADICTORY scenarios that could have occurred:
 Case a : Beth begins the month with $500. On Day 2, she deposits $500 more. On Day 3, she withdraws $1000. In this case,  Beth's balance went below $100 .
 Case b : Beth begins the month with $500. On Day 2, she deposits $10,000 more. On Day 3, she withdraws $1000. No other deposits or withdrawals are made for the rest of the month. In this case,  Beth's balance NEVER went below $100 .
Since we cannot answer the  REPHRASED target question  with certainty, the combined statements are NOT SUFFICIENT

Answer: E

Cheers,
Brent

CrackverbalGMAT · Answer

This is a Yes-No type of DS question. The question we have to answer is if the bank charged Beth a service fee, which in other words, boils down to finding if her account balance fell below $100.

From statement I alone, a total of $1000 was withdrawn from Beth’s account. But, we do not know how much the balance in the account was before the withdrawal was done. 
We also do not have any information about the deposits that were made, statement I doesn’t tell us anything about deposits made. 
Statement I alone is insufficient to answer the question. Answer options A and D can be eliminated. Possible answer options at this stage are B, C or E.

From statement II alone, Beth’s regular checking account had $500 at the beginning of last month. This is very insufficient to find out what the balance was at the end of the month and hence to find out if the service fee was charged.
Statement II alone is insufficient, answer option B can be eliminated. Possible answer options are C or E.

Combining statements I and II, we have the following:
From statement II, we have the information about the balance at the beginning of the month. 
From statement I, we have the information about the total amount due to the withdrawals made. 
However,   we still do not have information about the deposits made into Beth’s account. It’s still possible that a substantial sum was deposited and her balance never even came close to $100, let alone being lesser.  
The combination of statements is insufficient to answer the question. Answer option C can be eliminated.

The correct answer option is E .

Hope that helps!
Arvind.

BrentGMATPrepNow · Answer

Target question :    Did the bank charge a service fee on Beth's regular checking account last month?

REPHRASED target question :    Did Beth's balance ever go below $100?

Statement 1 : During last month, a total of $1,000 was withdrawn from Beth's regular checking account.   
Were given no information about her starting balance, so we can't say whether or not Beth's balance went below $100 
INSUFFICIENT

Statement 2 : At the beginning of last month, Beth's regular checking account balance was $500.  
Were given no information about how much money Beth withdrew over the month, so we can't say whether or not Beth's balance went below $100 
INSUFFICIENT

Statements 1 and 2 combined    
Here are two CONTRADICTORY scenarios that could have occurred:
 Case a : Beth begins the month with $500. On Day 2, she deposits $500 more. On Day 3, she withdraws $1000. In this case,  Beth's balance went below $100 .
 Case b : Beth begins the month with $500. On Day 2, she deposits $10,000 more. On Day 3, she withdraws $1000. No other deposits or withdrawals are made for the rest of the month. In this case,  Beth's balance NEVER went below $100 .
Since we cannot answer the  REPHRASED target question  with certainty, the combined statements are NOT SUFFICIENT

Answer = E

Cheers,
Brent

7Amulya · Answer

Hi Bunuel,

Please clarify me why statement 2 is not true. It is given in the question stem that service charge is applicable at any time during the month. Doesn't that mean if there is checking account balance was $500, the service charge will be applied during that time?

Bunuel · Answer

The service fee applies only if the account balance falls  below $100  at any time during the month. However, statement (2) only tells us that Beth’s balance was $500 at the beginning of the month. It doesn’t provide any information about whether her balance dropped below $100 at any point later in the month. Just because her balance started at $500 doesn’t guarantee it stayed above $100 throughout the month.

So, statement (2) alone is insufficient to determine if the service fee was charged.

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Beth's bank charges a service fee on a regular checking account for ea

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Beth's bank charges a service fee on a regular checking account for ea

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