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Max purchased a guitar for a total of $624,which consisted of the price of the guitar and the sales tax.Was the sales tax rate greater than 3 percent ? (1) The price of the guitar that Max purchased was less than$602.

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AbdurRakib wrote:
Max purchased a guitar for a total of $624,which consisted of the price of the guitar and the sales tax.Was the sales tax rate greater than 3 percent ? (1) The price of the guitar that Max purchased was less than$602.

(2) The sales tax for the guitar that Max purchased was less than $30. Target question: Was the sales tax rate greater than 3 percent? Given: Max purchased a guitar for a total of$624, which consisted of the price of the guitar and the sales tax.

Statement 1: The price of the guitar that Max purchased was less than $602. Let's see what would happen if the sales tax were EXACTLY 3% 1% of$602 = $6.02 So, 3% of$602 ≈ $18 So with a sales tax of EXACTLY 3%, the tax would be$18
This means the TOTAL price would equal $602 +$18 = $620 However, we're told that Max paid$624. Therefore, the tax rate must be GREATER than 3%

NOTE: we're actually told that the price of the guitar was less than $602. This doesn't matter. If the price of the guitar is less than$602, then getting the TOTAL cost to $624, would require an even greater sales tax. So, we can be certain that the tax rate is GREATER than 3% Since we can answer the target question with certainty, statement 1 is SUFFICIENT Statement 2: The sales tax for the guitar that Max purchased was less than$30.
Let's test some possible cases.
Case a: the sales tax is $24. This means the pre-tax price =$624 - $24 =$600. We know that 1% of $600 is$6, which means 3% of $600 is$18. Since the actual sales tax (in this scenario) is $24, we can conclude that the tax rate is GREATER than 3% Case b: the sales tax is$4. This means the pre-tax price = $624 -$4 = $620. We know that 1% of$620 is $6.20, which means 3% of$620 is $18.60. Since the actual sales tax (in this scenario) is$4, we can conclude that the tax rate is LESS than 3%
Since we cannot answer the target question with certainty, statement 2 is NOT SUFFICIENT

Cheers,
Brent
_________________

Originally posted by GMATPrepNow on 12 Jan 2018, 08:54.
Last edited by GMATPrepNow on 10 Dec 2019, 14:16, edited 1 time in total.
Retired Moderator P
Joined: 22 Aug 2013
Posts: 1399
Location: India
Re: Max purchased a guitar for a total of $624,which consisted of the pric [#permalink] ### Show Tags 12 4 If price of guitar is P, and sales tax on it is S. Total price including sales tax = P + S =$624. We have to answer whether S > 3% of P or whether S > 0.03P

Statement 1. Lets say if P = $602, then with 3% sales tax, total price = 602 + 0.03*602 = 618.06, which is < 624 So that means even at price of 602, we need to apply sales tax of greater than 3% so as to reach the required amount of 624. Thus when the price is less than 602, definitely for every such case sales tax would need to be higher than 3% to reach the required amount of 624. Thus sufficient. Statement 2. Sales tax is <$30. Sales tax could be $4, thus P =$620, here tax is < 3%
But sales tax could be $24, thus P =$600, here tax is > 3%
Clearly the statement is not sufficient.

##### General Discussion
Manager  S
Joined: 05 Nov 2014
Posts: 97
Location: India
Concentration: Strategy, Operations
GMAT 1: 580 Q49 V21
GPA: 3.75
Re: Max purchased a guitar for a total of $624,which consisted of the pric [#permalink] ### Show Tags 4 4 Max purchased a guitar for a total of$624,which consisted of the price of the guitar and the sales tax.Was the sales tax rate greater than 3 percent ?

(1) The price of the guitar that Max purchased was less than $602. (2) The sales tax for the guitar that Max purchased was less than$30.

Solution:

Tricky one. Be aware of the trap.

Statement 1: First calculate what's 3% of 624. It is 3x6.24=18.72. The difference between C.P of guitar and Cost paid is 624-602=22. Therefore it is clear that the sales tax rate is greater than 3%.

Statement 2: We don't know the exact value of the sales tax. Though it is lesser than 30, it can be lesser,equal or greater than 3%(18.72). Insufficient.

Therefore, the answer is Option A.
Director  V
Joined: 04 Dec 2015
Posts: 730
Location: India
Concentration: Technology, Strategy
WE: Information Technology (Consulting)
Re: Max purchased a guitar for a total of $624,which consisted of the pric [#permalink] ### Show Tags 3 5 AbdurRakib wrote: Max purchased a guitar for a total of$624,which consisted of the price of the guitar and the sales tax.Was the sales tax rate greater than 3 percent ?

(1) The price of the guitar that Max purchased was less than $602. (2) The sales tax for the guitar that Max purchased was less than$30.

(1) The price of the guitar that Max purchased was less than $602. Maximum price of guitar can be 601. therefore sales tax price would be $$624 - 601 = 23$$ Minimum sales tax percent $$= \frac{23}{624}*100 = 3.6$$%. Any reduction in the price of guitar will increase the sales tax price, ie; numerator will increase and hence the sales tax percent will also increase. Therefore sales tax rate is greater than 3%. ------ I is Sufficient. (2) The sales tax for the guitar that Max purchased was less than$30.

Maximum sales price would be $29 (less than$30). Therefore Sales price rate $$= \frac{29}{624} * 100 = 4.6$$%

or

If sales price is $1. Sales price rate $$= \frac{1}{624} * 100 = 0.16$$% (2) gives multiple values of sales price rate. II is Not Sufficient. Only I alone is Sufficient. Answer (A) Target Test Prep Representative V Status: Founder & CEO Affiliations: Target Test Prep Joined: 14 Oct 2015 Posts: 9085 Location: United States (CA) Re: Max purchased a guitar for a total of$624,which consisted of the pric  [#permalink]

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1
2
AbdurRakib wrote:
Max purchased a guitar for a total of $624,which consisted of the price of the guitar and the sales tax.Was the sales tax rate greater than 3 percent ? (1) The price of the guitar that Max purchased was less than$602.

(2) The sales tax for the guitar that Max purchased was less than $30. We are given that Max purchased a guitar for a total of$624, which was the price of the guitar and the sales tax. If we let the price of the guitar = p and n = the tax rate, then we have:

624 = p + (n/100)p

624 = p(1 + n/100)

624 = p[(100 + n)/100]

62,400 = p[(100 + n)

62,400/(100 + n) = p

We need to determine whether n > 3.

Statement One Alone:

The price of the guitar that Max purchased was less than $602. Since p < 602 and 62,400/(100 + n) = p, we have: 62,400/(100 + n) < 602 62,400 < 60,200 + 602n 2,200 < 602n 2,200/602 ≈ 3.65 < n Since n is greater than 3.65, the sales tax is greater than 3%. Statement Two Alone: The sales tax for the guitar that Max purchased was less than$30.

Statement two alone is not sufficient to answer the question. For instance, if the tax was $0, then the tax rate was less than 3%; however, if the tax was$24, the price of the guitar would be $600, and the tax rate would be 24/600 = 4/100 = 4%, which is greater than 3%. Answer: A _________________ # Scott Woodbury-Stewart Founder and CEO Scott@TargetTestPrep.com See why Target Test Prep is the top rated GMAT quant course on GMAT Club. Read Our Reviews If you find one of my posts helpful, please take a moment to click on the "Kudos" button. Intern  B Joined: 14 Jul 2017 Posts: 2 Re: Max purchased a guitar for a total of$624,which consisted of the pric  [#permalink]

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sashiim20 wrote:
AbdurRakib wrote:
Max purchased a guitar for a total of $624,which consisted of the price of the guitar and the sales tax.Was the sales tax rate greater than 3 percent ? (1) The price of the guitar that Max purchased was less than$602.

(2) The sales tax for the guitar that Max purchased was less than $30. (1) The price of the guitar that Max purchased was less than$602.

Maximum price of guitar can be 601. therefore sales tax price would be $$624 - 601 = 23$$

Minimum sales tax percent $$= \frac{23}{624}*100 = 3.6$$%.

Any reduction in the price of guitar will increase the sales tax price, ie; numerator will increase and hence the sales tax percent will also increase.

Therefore sales tax rate is greater than 3%. ------ I is Sufficient.

(2) The sales tax for the guitar that Max purchased was less than $30. Maximum sales price would be$29 (less than $30). Therefore Sales price rate $$= \frac{29}{624} * 100 = 4.6$$% or If sales price is$1. Sales price rate $$= \frac{1}{624} * 100 = 0.16$$%

(2) gives multiple values of sales price rate. II is Not Sufficient.

Only I alone is Sufficient. Answer (A)

Though Answer is A, the sale tax is calculated on the price of guitar ie. 601 or less. It cant be calculated in total. Total = Price + sale tax. Am I wrong ?
Manager  S
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GMAT 1: 670 Q45 V38
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Re: Max purchased a guitar for a total of $624,which consisted of the pric [#permalink] ### Show Tags amanvermagmat wrote: If price of guitar is P, and sales tax on it is S. Total price including sales tax = P + S =$624. We have to answer whether S > 3% of P or whether S > 0.03P

Statement 1. Lets say if P = $602, then with 3% sales tax, total price = 602 + 0.03*602 = 618.06, which is < 624 So that means even at price of 602, we need to apply sales tax of greater than 3% so as to reach the required amount of 624. Thus when the price is less than 602, definitely for every such case sales tax would need to be higher than 3% to reach the required amount of 624. Thus sufficient. Statement 2. Sales tax is <$30. Sales tax could be $4, thus P =$620, here tax is < 3%
But sales tax could be $24, thus P =$600, here tax is > 3%
Clearly the statement is not sufficient.

I have no idea why I didn't attempt the problem this way. Thank you and +1 kudos!
Manager  S
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GMAT 4: 700 Q49 V36
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Max purchased a guitar for a total of $624,which consisted of the pric [#permalink] ### Show Tags 1 sashiim20 wrote: AbdurRakib wrote: Max purchased a guitar for a total of$624,which consisted of the price of the guitar and the sales tax.Was the sales tax rate greater than 3 percent ?

(1) The price of the guitar that Max purchased was less than $602. (2) The sales tax for the guitar that Max purchased was less than$30.

(1) The price of the guitar that Max purchased was less than $602. Maximum price of guitar can be 601. therefore sales tax price would be $$624 - 601 = 23$$ Minimum sales tax percent $$= \frac{23}{624}*100 = 3.6$$%. Any reduction in the price of guitar will increase the sales tax price, ie; numerator will increase and hence the sales tax percent will also increase. Therefore sales tax rate is greater than 3%. ------ I is Sufficient. (2) The sales tax for the guitar that Max purchased was less than$30.

Maximum sales price would be $29 (less than$30). Therefore Sales price rate $$= \frac{29}{624} * 100 = 4.6$$%

or

If sales price is $1. Sales price rate $$= \frac{1}{624} * 100 = 0.16$$% (2) gives multiple values of sales price rate. II is Not Sufficient. Only I alone is Sufficient. Answer (A) U are calculating the sales tax percent on 642. It has to be calculated on the PRICE BEFORE THE SALEX TAX was applied. Example - In ur statement one.. It should be Minimum sales tax percent = 23/601 * 100 Intern  B Joined: 20 Nov 2017 Posts: 7 Re: Max purchased a guitar for a total of$624,which consisted of the pric  [#permalink]

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@amanvermaggmat Thank you so much! I loved the way you explained it!
Veritas Prep GMAT Instructor V
Joined: 16 Oct 2010
Posts: 9998
Location: Pune, India
Re: Max purchased a guitar for a total of $624,which consisted of the pric [#permalink] ### Show Tags 1 AbdurRakib wrote: Max purchased a guitar for a total of$624,which consisted of the price of the guitar and the sales tax.Was the sales tax rate greater than 3 percent ?

(1) The price of the guitar that Max purchased was less than $602. (2) The sales tax for the guitar that Max purchased was less than$30.

Responding to a pm:

Total = 624 = Guitar Price + Sales Tax

(1) The price of the guitar that Max purchased was less than $602. Let's say the price of the guitar is actually 602 which means tax is$22.
1% of 602 is 6.02 so 3% is $18.06. In this case, the tax is already more than 3%. If the price of the guitar is lower than 602, the tax will always be more than 3%. Sufficient. (2) The sales tax for the guitar that Max purchased was less than$30.

Let's say the sales tax was exactly $30. In that case, the price of guitar is$594
1% of 594 is 5.94 so 3% is about $18. But the tax is$30 which is much more than 3%.

The tax is lower than $30. Say, it is$10. In that case, cost of guitar is $614 and the tax is less than 3%. So here, the tax may be more than 3% or less than 3%. Not sufficient. Answer (A) _________________ Karishma Veritas Prep GMAT Instructor Learn more about how Veritas Prep can help you achieve a great GMAT score by checking out their GMAT Prep Options > Manager  G Joined: 18 Jul 2015 Posts: 103 GMAT 1: 530 Q43 V20 WE: Analyst (Consumer Products) Re: Max purchased a guitar for a total of$624,which consisted of the pric  [#permalink]

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1
GMATPrepNow wrote:
AbdurRakib wrote:
Max purchased a guitar for a total of $624,which consisted of the price of the guitar and the sales tax.Was the sales tax rate greater than 3 percent ? (1) The price of the guitar that Max purchased was less than$602.

(2) The sales tax for the guitar that Max purchased was less than $30. Target question: Was the sales tax rate greater than 3 percent? Given: Max purchased a guitar for a total of$624, which consisted of the price of the guitar and the sales tax.

Statement 1: The price of the guitar that Max purchased was less than $602. Let's see what would happen if the sales tax were EXACTLY 3% 1% of$602 = $6.02 So, 3% of$602 ≈ $18 So with a sales tax of EXACTLY 3%, the tax would be$18
This means the TOTAL price would equal $602 +$18 = $620 However, we're told that Max paid$624. Therefore, the tax rate must be GREATER than 3%

NOTE: we're actually told that the price of the guitar was less than $602. This doesn't matter. If the price of the guitar is less than$602, then getting the TOTAL cost to $624, would require an even greater sales tax. So, we can be certain that the tax rate is GREATER than 3% Since we can answer the target question with certainty, statement 1 is SUFFICIENT Statement 2: The sales tax for the guitar that Max purchased was less than$30.
Let's test some possible cases.
Case a: the sales tax is $24. This means the pre-tax price =$624 - $24 =$600. We know that 1% of $600 is$6, which means 3% of $600 is$18. Since the actual sales tax (in this scenario) is $29, we can conclude that the tax rate is GREATER than 3% Case b: the sales tax is$4. This means the pre-tax price = $624 -$4 = $620. We know that 1% of$620 is $6.20, which means 3% of$620 is $18.60. Since the actual sales tax (in this scenario) is$4, we can conclude that the tax rate is LESS than 3%
Since we cannot answer the target question with certainty, statement 2 is NOT SUFFICIENT

Cheers,
Brent

GMATPrepNow

Hi Brent,

The $29 seems like a typo in the highlighted part to me. Should it not be be$24? Let us know if that is the case.

Warm Regards,
Pritishd
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Cheers. Wishing Luck to Every GMAT Aspirant!
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Joined: 12 Sep 2015
Posts: 4219
Re: Max purchased a guitar for a total of $624,which consisted of the pric [#permalink] ### Show Tags Top Contributor Pritishd wrote: GMATPrepNow Hi Brent, The$29 seems like a typo in the highlighted part to me. Should it not be be $24? Let us know if that is the case. Warm Regards, Pritishd Good catch. That was, indeed, a typo. I have corrected the error. Thanks! Kudos for you!!! Cheers, Brent _________________ Re: Max purchased a guitar for a total of$624,which consisted of the pric   [#permalink] 10 Dec 2019, 14:17
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