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# M08-17

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Math Expert
Joined: 02 Sep 2009
Posts: 47010

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16 Sep 2014, 00:37
1
5
00:00

Difficulty:

95% (hard)

Question Stats:

48% (01:56) correct 52% (02:33) wrong based on 121 sessions

A. 14%
B. 27%
C. 30%
D. 34%
E. 35%

A. 14%
B. 27%
C. 30%
D. 34%
E. 35%

The price of $216 is irrelevant to finding the answer. For any price $$X$$ the customer would pay: • First scheme: $$0.2X + 10*0.1X = 1.2X$$ • Second scheme: $$0.1X + 20*0.08X = 1.7X$$ The percentage difference = $$100\% * \frac{1.7X - 1.2X}{1.7X} = 100\% * \frac{0.5}{1.7} \approx 100\% * \frac{0.51}{1.7} = 30\%$$ Answer: C Hi Bunuel, The mistake I made was that I took 1.2 instead of 1.7 in the base. $$\frac{1.7X - 1.2X}{1.2X}$$ How do you decide what to take as denominator ? For any case if possible . I always followed$$\frac{Final-Initial}{Initial}$$ but clearly I am not able to it here.Please help me out !! Thanks Math Expert Joined: 02 Sep 2009 Posts: 47010 Re: M08-17 [#permalink] ### Show Tags 17 Aug 2015, 03:13 2 anurag356 wrote: Bunuel wrote: Official Solution: Two payment schemes are available for customers in the N'K store. The first scheme includes a down payment of 20% of the purchase price and 10 monthly payments of 10% each. The second includes a down payment of 10% and 20 monthly payments of 8% each. If a customer buys a TV for$216, by what percent will he find the first scheme cheaper than the second (approximately)?

A. 14%
B. 27%
C. 30%
D. 34%
E. 35%

The price of $216 is irrelevant to finding the answer. For any price $$X$$ the customer would pay: • First scheme: $$0.2X + 10*0.1X = 1.2X$$ • Second scheme: $$0.1X + 20*0.08X = 1.7X$$ The percentage difference = $$100\% * \frac{1.7X - 1.2X}{1.7X} = 100\% * \frac{0.5}{1.7} \approx 100\% * \frac{0.51}{1.7} = 30\%$$ Answer: C Hi Bunuel, The mistake I made was that I took 1.2 instead of 1.7 in the base. $$\frac{1.7X - 1.2X}{1.2X}$$ How do you decide what to take as denominator ? For any case if possible . I always followed$$\frac{Final-Initial}{Initial}$$ but clearly I am not able to it here.Please help me out !! Thanks Put in the denominator the value you are comparing to: "If a customer buys a TV for$216, by what percent will he find the first scheme cheaper than the second?"
_________________
Intern
Joined: 16 Feb 2013
Posts: 18
Location: India
GMAT 1: 630 Q44 V35
GPA: 3.57

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07 Dec 2015, 11:33
i subtracted the origional amount ie..20% of x and made them in 10% each in 10 installment..Logically the question does not say that but i thought this is how it should be..
Can you please guide as how should i read this question ?
Current Student
Joined: 28 Aug 2016
Posts: 90
Concentration: Strategy, General Management

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29 Sep 2016, 15:48
1
jevish wrote:
i subtracted the origional amount ie..20% of x and made them in 10% each in 10 installment..Logically the question does not say that but i thought this is how it should be..
Can you please guide as how should i read this question ?

Down payment means you are paying certain percentage of item up front.

Therefore, 20% down payment means you are paying 20% of the price at the time of purchase.

I agree that 10% each part may be confusing and could have been worded better as "10 payments, each payment being 10% of the purchase price."
Intern
Joined: 02 Sep 2016
Posts: 10

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06 Oct 2016, 01:05
can you explain how you got the equation of first scheme to=0.2x+10.0.1x=1.2x?
Current Student
Joined: 28 Aug 2016
Posts: 90
Concentration: Strategy, General Management

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06 Oct 2016, 02:21
manchitkapoor wrote:
can you explain how you got the equation of first scheme to=0.2x+10.0.1x=1.2x?

20% down payment + 10% monthly payment X 10 months.

x is the price of purchase, which is being financed with above terms.
Intern
Joined: 04 Dec 2015
Posts: 7

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22 Feb 2017, 08:00
Hi,

though I followed the same process, when I found the final ratio 5/17 I simply noticed that 5/20 < 5/17 < 5/15, thus I picked 27% since that ratio is slightly less than 5/15

How did you come up to 30% from 0,5/1,7 ? Or maybe the Answer choice B should be eliminated in order to avoid ambiguity?
Math Expert
Joined: 02 Sep 2009
Posts: 47010

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22 Feb 2017, 08:17
Nipson wrote:
Hi,

though I followed the same process, when I found the final ratio 5/17 I simply noticed that 5/20 < 5/17 < 5/15, thus I picked 27% since that ratio is slightly less than 5/15

How did you come up to 30% from 0,5/1,7 ? Or maybe the Answer choice B should be eliminated in order to avoid ambiguity?

0.5/1.7 = 0.294...

The way we got 30% is as follows:

$$100\% * \frac{0.5}{1.7} \approx 100\% * \frac{0.51}{1.7} = 30\%$$
_________________
Intern
Joined: 14 Mar 2016
Posts: 39
Location: India
Schools: ISB '18
WE: Engineering (Energy and Utilities)

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18 Apr 2017, 01:39
if we don't take approx. value then answer is 27.4% that is close to choice B. Therefore answer options should be kept distant from one another
Intern
Joined: 14 Mar 2016
Posts: 39
Location: India
Schools: ISB '18
WE: Engineering (Energy and Utilities)

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18 Apr 2017, 01:46
Oh sorry ! I made a calculation mistake ... it's 29.4 %
Manager
Joined: 04 Jun 2015
Posts: 85

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18 Apr 2017, 14:51
Hi Bunuel,

Is it wrong to assume from the statement "The first scheme includes a down payment of 20% of the purchase price and 10 monthly payments of 10% each" that 10 monthly payments of 10% may be different?
For instance the initial cost is 100$with 10 monthly payments of 10% each. So first you pay 10$, remaining is 90$, then you pay 10% of 90$ i.e 9$and so on. In that case we cannot use the equation 0.2X+10*0.1X = 1.2X. Please correct me if I am wrong!! _________________ Sortem sternit fortem! Manager Joined: 14 May 2015 Posts: 52 Re: M08-17 [#permalink] ### Show Tags 06 May 2017, 15:04 First : 0.2a+10∗0.1a=1.2X0.2a+10∗0.1a=1.2a Second : 0.1a+20∗0.08a=1.7a (1.7-1.2)/1.7=30% Current Student Joined: 31 Mar 2013 Posts: 7 Location: India GMAT 1: 750 Q50 V40 GPA: 3.12 Re: M08-17 [#permalink] ### Show Tags 24 Jul 2017, 07:49 1 I think this is a poor-quality question and I agree with explanation. I agree the cost plays no role in solving this question but I feel the question is really poorly worded. If we are talking about real world examples, if we buy a car or a house, a down payment is paid upfront and the monthly payments are calculated on the rest of the amount not on the principal amount. If you are going to calculate on the principal amount then that should be clearly intended in the question stem. Secondly, if you are going to calculate the payments on the rest of the principal amount at least give different answer options. I am sure that majority of the question takers must be marking D/E as the answer and that is why this question is in the 700 category. Senior Manager Joined: 12 Feb 2015 Posts: 319 Re: M08-17 [#permalink] ### Show Tags 06 Jul 2018, 04:05 Rookie84 wrote: jevish wrote: i subtracted the origional amount ie..20% of x and made them in 10% each in 10 installment..Logically the question does not say that but i thought this is how it should be.. Can you please guide as how should i read this question ? Down payment means you are paying certain percentage of item up front. Therefore, 20% down payment means you are paying 20% of the price at the time of purchase. I agree that 10% each part may be confusing and could have been worded better as "10 payments, each payment being 10% of the purchase price." I agree the wording of this question is very poor & does not communicate clearly whether the installments are calculated on remaining amount after the down payment or purchase price. What is the source of this question? _________________ "Please hit +1 Kudos if you like this post" _________________ Manish "Only I can change my life. No one can do it for me" Math Expert Joined: 02 Sep 2009 Posts: 47010 Re: M08-17 [#permalink] ### Show Tags 06 Jul 2018, 07:21 vil1 wrote: I think this is a poor-quality question and I agree with explanation. I agree the cost plays no role in solving this question but I feel the question is really poorly worded. If we are talking about real world examples, if we buy a car or a house, a down payment is paid upfront and the monthly payments are calculated on the rest of the amount not on the principal amount. If you are going to calculate on the principal amount then that should be clearly intended in the question stem. Secondly, if you are going to calculate the payments on the rest of the principal amount at least give different answer options. I am sure that majority of the question takers must be marking D/E as the answer and that is why this question is in the 700 category. Thank you. The question is removed from the database. _________________ SVP Joined: 26 Mar 2013 Posts: 1718 Re: M08-17 [#permalink] ### Show Tags 07 Jul 2018, 12:24 Bunuel wrote: Two payment schemes are available for customers in the N'K store. The first scheme includes a down payment of 20% of the purchase price and 10 monthly payments of 10% each. The second includes a down payment of 10% and 20 monthly payments of 8% each. If a customer buys a TV for$216, by what percent will he find the first scheme cheaper than the second (approximately)?

A. 14%
B. 27%
C. 30%
D. 34%
E. 35%

Dear Bunuel

I rarely comment on the wording but the highlighted is very vague and unclear? what does 10% or 8% represent? Also, 10% of the remaining or from original price?
I could not interpret them until I saw your solution. I hope you can re-word those part.
Math Expert
Joined: 02 Sep 2009
Posts: 47010

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07 Jul 2018, 12:27
Mo2men wrote:
Bunuel wrote:
Two payment schemes are available for customers in the N'K store. The first scheme includes a down payment of 20% of the purchase price and 10 monthly payments of 10% each. The second includes a down payment of 10% and 20 monthly payments of 8% each. If a customer buys a TV for \$216, by what percent will he find the first scheme cheaper than the second (approximately)?

A. 14%
B. 27%
C. 30%
D. 34%
E. 35%

Dear Bunuel

I rarely comment on the wording but the highlighted is very vague and unclear? what does 10% or 8% represent? Also, 10% of the remaining or from original price?
I could not interpret them until I saw your solution. I hope you can re-word those part.

The question is removed from the database.
_________________

_________________
SVP
Joined: 26 Mar 2013
Posts: 1718

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07 Jul 2018, 12:30
Bunuel wrote:

The question is removed from the database.
_________________

Thanks for your reply but which database? it is till in the GMATclub test directory.
Re: M08-17   [#permalink] 07 Jul 2018, 12:30

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