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Mr. Goldstein decides to buy a new car with a sticker price of $45,500

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Joined: 13 Sep 2016
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Mr. Goldstein decides to buy a new car with a sticker price of $45,500 [#permalink]

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New post 18 Oct 2016, 11:20
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Question Stats:

93% (01:04) correct 8% (00:58) wrong based on 40 sessions

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Mr. Goldstein decides to buy a new car with a sticker price of $45,500. If the sales tax comes out to 5 percent of the purchase price, but Mr. Goldstein is able to negotiate a purchase price that is a 20 percent discount off the sticker price, how much sales tax does Mr. Goldstein pay?

a) $455
b) $910
c) $1560
d) $1820
e) $2275

Please assist with above problem.
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Re: Mr. Goldstein decides to buy a new car with a sticker price of $45,500 [#permalink]

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New post 18 Oct 2016, 11:24
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Sticker Price on Car = $45,500

He is going to get 20% Discount on this, so the final price which he is going to pay on which sales tax would be applicable = .8*$45,500

Which on solving gives = $36,400

Sales tax to be paid is 5% on $36,400 = .05*$36400 = $1820

Option D

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Re: Mr. Goldstein decides to buy a new car with a sticker price of $45,500 [#permalink]

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New post 21 Jan 2018, 13:51
Hi All,

The answer choices to this question are 'spread out' enough that you can do some estimation (without having to do every exact calculation).

The starting sticker price on a car is $45,500, which I'll 'round down' to $45,000.
The 20% discount off of THAT price would be: $45,000 - (.2)($45,000) = $45,000 - $9,000 = $36,000
The 5% tax on the $36,000 = (.05)($36,000) = $1800

Since I rounded down the initial car price, the correct answer would be a little more than $1800....

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Re: Mr. Goldstein decides to buy a new car with a sticker price of $45,500   [#permalink] 21 Jan 2018, 13:51
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