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# M18-07

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Math Expert
Joined: 02 Sep 2009
Posts: 51067

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16 Sep 2014, 00:03
00:00

Difficulty:

55% (hard)

Question Stats:

59% (00:48) correct 41% (01:11) wrong based on 268 sessions

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Jack owes the bank $1500. He is required to pay back 4% of this amount quarterly. If no interest is charged, how many months will it take Jack to reduce his debt to$900 ?

A. 10
B. 15
C. 30
D. 36
E. 45

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Math Expert
Joined: 02 Sep 2009
Posts: 51067

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16 Sep 2014, 00:03
Official Solution:

Jack owes the bank $1500. He is required to pay back 4% of this amount quarterly. If no interest is charged, how many months will it take Jack to reduce his debt to$900 ?

A. 10
B. 15
C. 30
D. 36
E. 45

To reduce his debt to $900, Jack has to pay back $$1500 - 900 = 600$$ USD. Because Jack pays back $$4\% * 1500 = 60$$ USD every quarter (i.e. every three months), it will take him $$\frac{600}{60}*3 = 30$$ months to pay back$600.

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Manager
Joined: 27 Mar 2016
Posts: 51

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18 Jun 2017, 09:12
Jack has to pay 1500-900=600
4%of 1500=60
60 * 10=600 i.e in 10 installments jack has to pay 600
1 installment is to be paid quarterly i.e every 3 months
so 3*10=30
C.
Intern
Joined: 02 Jan 2018
Posts: 27
Location: United Kingdom
GMAT 1: 740 Q50 V41
GPA: 3.7

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02 Jul 2018, 22:59
The question implies that Jack will have to pay back a changing amount. e.g.

Q1 he pays back 4% * 1500
Q2 he pays back 4% * 1440
...

The answer seems to indicate that he actually needs to pay back a constant amount each period...which makes the solution a lot easier!
Intern
Joined: 02 Jan 2018
Posts: 27
Location: United Kingdom
GMAT 1: 740 Q50 V41
GPA: 3.7

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02 Jul 2018, 23:01
I think this is a poor-quality question and I agree with explanation. Question implies that the amount needing to be paid back varies per quarter, which adds a high degree of complexity to the question.
Re M18-07 &nbs [#permalink] 02 Jul 2018, 23:01
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# M18-07

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