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

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Manager
Joined: 13 Sep 2016
Posts: 115
GMAT 1: 800 Q51 V51
Mr. Goldstein decides to buy a new car with a sticker price of \$45,500  [#permalink]

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18 Oct 2016, 11:20
00:00

Difficulty:

15% (low)

Question Stats:

88% (01:30) correct 12% (01:34) wrong based on 46 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

Manager
Joined: 29 Aug 2008
Posts: 106
Re: Mr. Goldstein decides to buy a new car with a sticker price of \$45,500  [#permalink]

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18 Oct 2016, 11:24
1
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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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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