Author 
Message 
TAGS:

Hide Tags

Manager
Joined: 07 Feb 2010
Posts: 139

Health insurance Plan A requires the insured to pay $1000 or [#permalink]
Show Tags
17 Dec 2010, 08:33
6
This post received KUDOS
30
This post was BOOKMARKED
Question Stats:
57% (01:29) correct 43% (01:47) wrong based on 661 sessions
HideShow timer Statistics
Health insurance Plan A requires the insured to pay $1000 or 50% of total cost, whichever is lower. Plan B requires the insured to pay the initial $300, but then pays 80% of the cost over $300. Which of the following is a cost level for which both insurance plans pay out the same amount? A. $600 B. $1000 C. $3800 D. $5300 E. $6200
Official Answer and Stats are available only to registered users. Register/ Login.



Math Expert
Joined: 02 Sep 2009
Posts: 45180

Re: Health insurance Plan [#permalink]
Show Tags
17 Dec 2010, 09:04
12
This post received KUDOS
Expert's post
11
This post was BOOKMARKED
anilnandyala wrote: Health insurance Plan A requires the insured to pay $1000 or 50% of total cost, whichever is lower. Plan B requires the insured to pay the initial $300, but then pays 80% of the cost over $300. Which of the following is a cost level for which both insurance plans pay out the same amount?
$600 $1000 $3800 $5300 $6200 Pay out for plan A: Cost$1,000 or Cost0.5*Cost=0.5*Cost, when 0.5*Cost<$1,000; Pay out for plan B: 0.8(Cost$300); The question is: for which of the following costs the pay outs are the same. C1,000=0.8(C300) > for C=3,800 and 0.5C=0.8(C300) > for C=800. As we have only $3,800 listed then it must be a correct answer. Or you can use backsolving for this question:A. C=$600: pay out for plan A will be 0.5*600=300 (as 0.5*600<1,000) and pay out for plan B will be 0.8*(600300)=240; B. C=$1000: pay out for plan A will be 0.5*1,00=500 (as 0.5*1,000<1,000) and pay out for plan B will be 0.8*(1,000300)=560; C. C=$3800: pay out for plan A will be 3,8001,000=2,800 (as 0.5*3,800>1,000) and pay out for plan B will be 0.8*(3,800300)=2,800 > 2,800=2,800; D. C=$5300: pay out for plan A will be 5,3001,000=4,300 (as 0.5*5,300>1,000) and pay out for plan B will be 0.8*(5,300300)=4,000; E. C=$6200:pay out for plan A will be 6,2001,000=5,200 (as 0.5*6,200>1,000) and pay out for plan B will be 0.8*(6,200300)=4,720. Answer: C. Hope it's clear.
_________________
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
Status: Happy
Joined: 17 Jan 2011
Posts: 4
Location: USA

Re: Health insurance Plan [#permalink]
Show Tags
18 Jan 2011, 23:12
Well i think the Ans would be C because i use the same method as the other member showed you above and i don't think there is another way of finding that pay out plan...
_________________
Any sufficiently advanced technology is indistinguishable from magic.



Senior Manager
Joined: 28 Jul 2011
Posts: 417
Location: United States
Concentration: International Business, General Management
GPA: 3.86
WE: Accounting (Commercial Banking)

Re: Health insurance Plan A requires the insured to pay $1000 or [#permalink]
Show Tags
22 May 2012, 19:54
Hi Bunnel. According to me the 2 equations are: 0.8(C – 300) + 300= 1000 OR 0.8(C – 300) + 300= 0.5C But i am confused with the question you formed the two equations C1,000=0.8(C300)>1^st and 0.5C=0.8(C300) Since the questions says if the cost is above 1000 he will pay which ever is lower, but according to your 1st equation he is paying more that 1000 i.e is 2800, please clarify if i am wrong, awaiting for your reply
_________________
+1 Kudos If found helpful..



Current Student
Joined: 21 May 2012
Posts: 96
Location: United States (CA)

Re: Health insurance Plan A requires the insured to pay $1000 or [#permalink]
Show Tags
22 May 2012, 20:37
5
This post received KUDOS
kotela wrote: Hi Bunnel.
According to me the 2 equations are: 0.8(C – 300) + 300= 1000 OR 0.8(C – 300) + 300= 0.5C
But i am confused with the question you formed the two equations
C1,000=0.8(C300)>1^st and 0.5C=0.8(C300)
Since the questions says if the cost is above 1000 he will pay which ever is lower, but according to your 1st equation he is paying more that 1000 i.e is 2800, please clarify if i am wrong, awaiting for your reply You are reading the question wrong. It is asking when the insurance company will pay the same amount of money not the insured. 0.8(C–300) = C–1000 OR 0.8(C–300) = 0.5C Solving the first equation gives us C=3800 Solving the second equation gives us C=800 Since 800 isn't one of the answers we can eliminate it and 3800 is the only possible answer. The correct answer is C.



Senior Manager
Joined: 28 Jul 2011
Posts: 417
Location: United States
Concentration: International Business, General Management
GPA: 3.86
WE: Accounting (Commercial Banking)

Re: Health insurance Plan A requires the insured to pay $1000 or [#permalink]
Show Tags
22 May 2012, 22:19
Cares wrote: kotela wrote: Hi Bunnel.
According to me the 2 equations are: 0.8(C – 300) + 300= 1000 OR 0.8(C – 300) + 300= 0.5C
But i am confused with the question you formed the two equations
C1,000=0.8(C300)>1^st and 0.5C=0.8(C300)
Since the questions says if the cost is above 1000 he will pay which ever is lower, but according to your 1st equation he is paying more that 1000 i.e is 2800, please clarify if i am wrong, awaiting for your reply You are reading the question wrong. It is asking when the insurance company will pay the same amount of money not the insured. 0.8(C–300) = C–1000 OR 0.8(C–300) = 0.5C Solving the first equation gives us C=3800 Solving the second equation gives us C=800 Since 800 isn't one of the answers we can eliminate it and 3800 is the only possible answer. The correct answer is C. Ya you are i misread the question....thanks for that and +1 kudos for you
_________________
+1 Kudos If found helpful..



Senior Manager
Joined: 13 Aug 2012
Posts: 443
Concentration: Marketing, Finance
GPA: 3.23

Re: Health insurance Plan A requires the insured to pay $1000 or [#permalink]
Show Tags
01 Dec 2012, 22:37
3
This post received KUDOS
Insured pays out: Plan A==>\(1000\) or \(C/2\) Plan B==>\(300\) Insurance pays out: Plan A==>\(C1000\) or \(C/2\) Plan B==>\(.8(C300)\) We are concerned with the payout made by Insurance. \(C1000=.8(C300)\) \(C=1000+.8C240\) \(.2C=760\) \(C=3800\) Answer:3800
_________________
Impossible is nothing to God.



Manager
Joined: 10 Mar 2013
Posts: 244
GMAT 1: 620 Q44 V31 GMAT 2: 690 Q47 V37 GMAT 3: 610 Q47 V28 GMAT 4: 700 Q50 V34 GMAT 5: 700 Q49 V36 GMAT 6: 690 Q48 V35 GMAT 7: 750 Q49 V42 GMAT 8: 730 Q50 V39

Re: Health insurance Plan A requires the insured to pay $1000 or [#permalink]
Show Tags
10 Aug 2014, 19:08
Algebra is truly a loser in this question. Backsolving is the fastest and most effective method here.



Manager
Joined: 20 Jul 2013
Posts: 58

Re: Health insurance Plan A requires the insured to pay $1000 or [#permalink]
Show Tags
22 Mar 2015, 05:33
TooLong150 wrote: Algebra is truly a loser in this question. Backsolving is the fastest and most effective method here. Having to rely on backsolving is truly hit or miss when it comes to timing. If you've mastered algebra, not only can you virtually solve most of the problems on the test, but this problem can also be completed around 30 seconds. Seems like a pretty fast time to me



SVP
Joined: 08 Jul 2010
Posts: 2099
Location: India
GMAT: INSIGHT
WE: Education (Education)

Re: Health insurance Plan A requires the insured to pay $1000 or [#permalink]
Show Tags
28 Oct 2015, 09:21
anilnandyala wrote: Health insurance Plan A requires the insured to pay $1000 or 50% of total cost, whichever is lower. Plan B requires the insured to pay the initial $300, but then pays 80% of the cost over $300. Which of the following is a cost level for which both insurance plans pay out the same amount?
A. $600 B. $1000 C. $3800 D. $5300 E. $6200 Case 1: What Insured pay is 1000 (as per plan A) = 300+(20/100)*(C300) Solving this equation, C = 3800Case 2: What Insured pay is (50/100)*C (as per plan A) = 300+(20/100)*(C300) Solving this equation, C = 800 Answer: Option C
_________________
Prosper!!! GMATinsight Bhoopendra Singh and Dr.Sushma Jha email: info@GMATinsight.com I Call us : +919999687183 / 9891333772 Online OneonOne Skype based classes and Classroom Coaching in South and West Delhi http://www.GMATinsight.com/testimonials.html
22 ONLINE FREE (FULL LENGTH) GMAT CAT (PRACTICE TESTS) LINK COLLECTION



Current Student
Joined: 12 Aug 2015
Posts: 292
Concentration: General Management, Operations
GMAT 1: 640 Q40 V37 GMAT 2: 650 Q43 V36 GMAT 3: 600 Q47 V27
GPA: 3.3
WE: Management Consulting (Consulting)

Health insurance Plan A requires the insured to pay $1000 or [#permalink]
Show Tags
20 Nov 2015, 11:56
"Health insurance Plan A requires the insured to pay $1000 or 50% of total cost, whichever is lower."  this confused me much. if i quoted the fee in my job this way i would be fired =) my clients would understand this without doubt: if the cost is 10 000 then the client has to pay only 1000 =))) yuuuupi
_________________
KUDO me plenty



Intern
Joined: 29 Dec 2014
Posts: 25
Concentration: Operations, Strategy
GMAT 1: 690 Q48 V35 GMAT 2: 710 Q48 V39

Re: Health insurance Plan A requires the insured to pay $1000 or [#permalink]
Show Tags
19 Jan 2016, 12:25
Absolutely agree...pathetic and horridly ambiguous wording....sch kind of wording never appears on gmat...pooh to Manhattan! The stmnt makes it seem as if we HV to choose whether 1000 bucks or C/2 is the payout, C being insurance cost...will sue GMAT if such poorly worded question appears.



Manager
Status: Profile 1
Joined: 20 Sep 2015
Posts: 72
GPA: 3.2
WE: Information Technology (Investment Banking)

Re: Health insurance Plan A requires the insured to pay $1000 or [#permalink]
Show Tags
30 Jul 2017, 07:49
anilnandyala wrote: Health insurance Plan A requires the insured to pay $1000 or 50% of total cost, whichever is lower. Plan B requires the insured to pay the initial $300, but then pays 80% of the cost over $300. Which of the following is a cost level for which both insurance plans pay out the same amount?
A. $600 B. $1000 C. $3800 D. $5300 E. $6200 Out of line .... this question is more of an SC question where you need to look at part "Plan B requires the insured to pay the initial $300, but then pays 80% of the cost over $300" where 'but then pays 80%' is mentioned for insurance company... otherwise this question would be some 600 level.



EMPOWERgmat Instructor
Status: GMAT Assassin/CoFounder
Affiliations: EMPOWERgmat
Joined: 19 Dec 2014
Posts: 11633
Location: United States (CA)
GRE 1: 340 Q170 V170

Re: Health insurance Plan A requires the insured to pay $1000 or [#permalink]
Show Tags
26 Jan 2018, 14:14
Hi All, You can answer this question with Algebra or by TESTing THE ANSWERS. Either way though, you have to pay careful attention to the wording of the prompt. Since Plan A requires a $1000 payment OR 50% of total cost from the insured  whichever is LOWER  there's a great tactical shortcut here: any total bill that is over $2,000 will require that the insured pay $1,000 through Plan A. Since most of the answers are over $2,000, we can look to see if any of them would require that a total of $1,000 be paid by the insured through Plan B. I'll start with the smallest option from that subgroup... Answer C: $3,800 Insurance pays (3800  300)(.8) = (3500)(.8) = 2800 Insured pays initial 300 + whatever the insurance does NOT pay (3500  2800 = 700). 300 + 700 = 1,000 This is a MATCH for what we're looking for, so this MUST be the answer. Final Answer: GMAT assassins aren't born, they're made, Rich
_________________
760+: Learn What GMAT Assassins Do to Score at the Highest Levels Contact Rich at: Rich.C@empowergmat.com
Rich Cohen
CoFounder & GMAT Assassin
Special Offer: Save $75 + GMAT Club Tests Free
Official GMAT Exam Packs + 70 Pt. Improvement Guarantee www.empowergmat.com/
***********************Select EMPOWERgmat Courses now include ALL 6 Official GMAC CATs!***********************



SVP
Joined: 12 Sep 2015
Posts: 2442
Location: Canada

Re: Health insurance Plan A requires the insured to pay $1000 or [#permalink]
Show Tags
14 Mar 2018, 12:05
anilnandyala wrote: Health insurance Plan A requires the insured to pay $1000 or 50% of total cost, whichever is lower. Plan B requires the insured to pay the initial $300, but then pays 80% of the cost over $300. Which of the following is a cost level for which both insurance plans pay out the same amount?
A. $600 B. $1000 C. $3800 D. $5300 E. $6200 Here's an algebraic approach: Let T = TOTAL COST Plan A: Person pays EITHER $1000 OR 0.5T, whichever is LESS Plan B: Person pays $300 plus 20% of anything over $300. In other words, the person pays $300 + 0.2(T  300)Since Plan A has two different scenarios, we need to test both. That is, create equations that see both plans costing the insured the same amount. Case #1) 1000 = 300 + 0.2(T  300).....now SOLVE Expand: 1000 = 300 + 0.2T  60 Rearrange: 760 = 0.2T Solve: T = 3800Perfect!! The correct answer is C Just for "fun" let's check out case #2 Case #2) 0.5T = 300 + 0.2(T  300).....now SOLVE Expand: 0.5T = 300 + 0.2T  60 Rearrange: 0.3T = 240 Solve: T = 800Hmmm, it seems that if the TOTAL cost were $800, both plans would require the insured to pay the same amount ($400). That said, $800 is not one of the answer choices. Also notice that the question says, "Which of the following is a cost level for which both insurance plans pay out the same amount?" So, there are two possible correct answers, and the question asks us to find one of them. Cheers, Brent
_________________
Brent Hanneson – Founder of gmatprepnow.com



Target Test Prep Representative
Status: Founder & CEO
Affiliations: Target Test Prep
Joined: 14 Oct 2015
Posts: 2597
Location: United States (CA)

Re: Health insurance Plan A requires the insured to pay $1000 or [#permalink]
Show Tags
15 Mar 2018, 10:17
anilnandyala wrote: Health insurance Plan A requires the insured to pay $1000 or 50% of total cost, whichever is lower. Plan B requires the insured to pay the initial $300, but then pays 80% of the cost over $300. Which of the following is a cost level for which both insurance plans pay out the same amount?
A. $600 B. $1000 C. $3800 D. $5300 E. $6200 We can let x = a cost level for which both insurance plans pay out the same amount. Since 50% of $2000 is $1000, if x > 2000, Plan A will pay out x  1000 and Plan B will pay out 0.8(x  300). Setting them equal, we have: x  1000 = 0.8(x  300) x  1000 = 0.8x  240 0.2x = 760 x = 3,800 Now, if x < 2000, then Plan A will pay out 0.5x and Plan B will still pay out 0.8(x  300). 0.5x = 0.8(x  300) 0.5x = 0.8x  240 240 = 0.3x 800 = x We see that x could be either 3,800 or 800. However, since the question asks for a cost level (instead of the cost level) and only 3,800 is given, then 3,800 is the correct answer. Answer: C
_________________
Scott WoodburyStewart
Founder and CEO
GMAT Quant SelfStudy Course
500+ lessons 3000+ practice problems 800+ HD solutions




Re: Health insurance Plan A requires the insured to pay $1000 or
[#permalink]
15 Mar 2018, 10:17






