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08 Mar 2026, 01:45
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C
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Difficulty:
25%
(medium)
Question Stats:
83% (02:10) correct
17%
(02:24)
wrong
based on 30
sessions
History
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Not Attempted Yet
Lucas plans to pay his tuition in 6 equal installments of $1,350 each. If he instead chose to pay the same tuition in 18 equal installments, the school would charge a 2% fee on the total tuition for using this payment plan.
What would be the amount of each installment?
A. $450
B. $453
C. $459
D. $468
E. $472.50
What would be the amount of each installment?
A. $450
B. $453
C. $459
D. $468
E. $472.50
08 Mar 2026, 02:41
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kevincan
Lucas originally planned to pay 6 equal installments of $1350 each.
Total amount to be paid by Lucas = 6*$1350 = $8100.
Suppose as per the new plan, he shifts the installment term from 6 months to 18 months.
In that case, the increased term is compensated with a 2% additional charge.
So, 2%*(8100) = $162.
Total amount = $8100+$162 = $8262.
This amount is split into 18 equal installments = $8,262 /18 = $459
Option C
08 Mar 2026, 11:43
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Key concept: Applying a Percent Fee to the Correct Base
Dereno's got the right answer above. What I want to flag is why students get this wrong, because the trap is almost always the same: the 2% fee gets applied to the wrong number.
The question says the school charges "a 2% fee on the total tuition." That's the base. Not the installment amount, not 18 × something — the total original tuition. The GMAT puts that phrase in the middle of a long sentence precisely so you skim past it.
Step 1 — Find the total tuition:
6 installments × $1,350 = $8,100
Step 2 — Calculate the 2% surcharge on the total:
2% × $8,100 = 0.02 × $8,100 = $162
Step 3 — New total with fee:
$8,100 + $162 = $8,262
Step 4 — Split into 18 equal installments:
$8,262 ÷ 18 = $459 → Answer: C
Common trap: Applying 2% to $1,350 (one original installment) gives $27, leading you toward $453 or $450 — both are wrong answers listed in the choices. The GMAT placed them there deliberately.
Takeaway: In Percent and Interest Problems, always identify the explicit base before calculating. If the question says "fee on the total," the total is your base — not whatever number is most visible in the problem.
— Kavya | 725 (99th percentile), GMAT Focus Edition
Dereno's got the right answer above. What I want to flag is why students get this wrong, because the trap is almost always the same: the 2% fee gets applied to the wrong number.
The question says the school charges "a 2% fee on the total tuition." That's the base. Not the installment amount, not 18 × something — the total original tuition. The GMAT puts that phrase in the middle of a long sentence precisely so you skim past it.
Step 1 — Find the total tuition:
6 installments × $1,350 = $8,100
Step 2 — Calculate the 2% surcharge on the total:
2% × $8,100 = 0.02 × $8,100 = $162
Step 3 — New total with fee:
$8,100 + $162 = $8,262
Step 4 — Split into 18 equal installments:
$8,262 ÷ 18 = $459 → Answer: C
Common trap: Applying 2% to $1,350 (one original installment) gives $27, leading you toward $453 or $450 — both are wrong answers listed in the choices. The GMAT placed them there deliberately.
Takeaway: In Percent and Interest Problems, always identify the explicit base before calculating. If the question says "fee on the total," the total is your base — not whatever number is most visible in the problem.
— Kavya | 725 (99th percentile), GMAT Focus Edition
