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The 15 homes in a new development are each to be sold for [#permalink]

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08 Nov 2012, 12:36

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The 15 homes in a new development are each to be sold for one of three different prices so that the developer receives an average (arithmetic mean) of $200,000 per home. If 4 of the homes are to be sold for $170,000 each and 5 are to be sold for $200,000 each, what will be the selling price of each of the remaining 6 homes?

A. $200,000 B. $210,000 C. $215,000 D. $220,000 E. $230,000

This is a classic problem that during your gmat exam makes you out of balance, nervous because you deal with a lot of information.

Ok take control of the question. (I have structured my answer step by step, like a process of thoughts)

First of all we have 15 homes so odd number.

Second this 15 is grouped in 3 blocks or groups whatever you want to say.

Now is the best part: one group is 170 of 4 this is important to take in account the other 5 (strees on this) 200

Now look at the answer choices : A is not possible. out

Now is the moment to attack the question. The best strategy here is a weighted average strategy.

considering the average is more or less in the middle, it follows that the group of 6 is what we are looking for and is between 170 and 200 or after 200. We have 170 200 and 6*x and the average is 200: in some place we have to put 6*x

Now in the average what value has a major "weight" No the group pf 4 with 170 ( value 680) but the 5 houses with 200 (value 1000).

So the average tends to the latter or is after, otherwise we do not have 200 like average. In this kind of problem the last value (in increasing order as we can see) is never the answer because put our value to close at the end point of our weighted average.

The 15 homes in a new development are each to be sold for one of three different prices so that the developer receives an average (arithmetic mean) of $200,000 per home. If 4 of the homes are to be sold for $170,000 each and 5 are to be sold for $200,000 each, what will be the selling price of each of the remaining 6 homes?

A. $200,000 B. $210,000 C. $215,000 D. $220,000 E. $230,000

Since the average price of 15 of the homes is $200, then the total price of these homes is 15*$200=$3,000.

The total price of 4 of the homes is 4*$170=$680; The total price of 5 of the homes is 5*$200=$1,000;

Therefore the total price of the remaining 6 of the homes is $3,000-($680+$1,000)=$1,320. The average price per home is $1,320/6=$220.

The 15 homes in a new development are each to be sold for [#permalink]

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19 Jan 2013, 23:24

The 15 homes in a new development are each to be sold for one of three different prices so that the developer receives an average (arithmetic mean) of $200,000 per home. If 4 of the homes are to be sold for $170,000 each and 5 are to be sold for $200,000 each, what will be the selling price of each of the remaining 6 homes?

A) $200,000 B) $210,000 C) $215,000 D) $220,000 E) $230,000

This was taken from GMAT prep test, but i didnt know that when you exit out you can not review the correct answers for the test.

Re: The 15 homes in a new development are each to be sold for [#permalink]

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20 Jan 2013, 00:13

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jsphcal wrote:

The 15 homes in a new development are each to be sold for one of three different prices so that the developer receives an average (arithmetic mean) of $200,000 per home. If 4 of the homes are to be sold for $170,000 each and 5 are to be sold for $200,000 each, what will be the selling price of each of the remaining 6 homes?

A) $200,000 B) $210,000 C) $215,000 D) $220,000 E) $230,000

This was taken from GMAT prep test, but i didnt know that when you exit out you can not review the correct answers for the test.

IMO the answer has to be D. 5 houses are being sold for 200,000. 4 houses are being sold for $30,000 less, resulting in a loss of $120,000. To make the average selling price intact i.e. $200,000, the remaining 6 houses must be sold at such a profit that it compensates for the loss of 120,000. Hence 6x=120,000. x=20,000. The 6 houses are sold at $20,000 profit or at $220,000. +1D
_________________

The 15 homes in a new development are each to be sold for one of three different prices so that the developer receives an average (arithmetic mean) of $200,000 per home. If 4 of the homes are to be sold for $170,000 each and 5 are to be sold for $200,000 each, what will be the selling price of each of the remaining 6 homes?

A) $200,000 B) $210,000 C) $215,000 D) $220,000 E) $230,000

This was taken from GMAT prep test, but i didnt know that when you exit out you can not review the correct answers for the test.

Merging similar topics. Please refer to the solutions above.
_________________

Re: The 15 homes in a new development are each to be sold for [#permalink]

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09 Dec 2014, 18:00

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Re: The 15 homes in a new development are each to be sold for [#permalink]

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09 Dec 2014, 18:04

Fastest way to do the calculation is as shown below: Avg = 200 so lets find the deviation from avg for each sale.

i.e for 4 homes its was -30, 5 homes it was 0 and let x be deviation for rest of the 6 homes.

setup a equation: -30*4 + 5*0 + x*6 = 0 <== (basically 0*15) find x = 20 so the homes should be sold for 220,000 of avg to converge to 200,000.

Answer: D

bssys wrote:

The 15 homes in a new development are each to be sold for one of three different prices so that the developer receives an average (arithmetic mean) of $200,000 per home. If 4 of the homes are to be sold for $170,000 each and 5 are to be sold for $200,000 each, what will be the selling price of each of the remaining 6 homes?

A. $200,000 B. $210,000 C. $215,000 D. $220,000 E. $230,000

Re: The 15 homes in a new development are each to be sold for [#permalink]

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06 Jan 2015, 01:53

I also used Paresh's approach - weighted average.

I only wanted to add that it helps to map out the information we have, after we write down the formula for the mean.

M=S/N Then, looking into the text, we know: M=200.000 N=15 houses S= M*N= 3.000.000 total amount of money earned by selling all 15 houses.

This 3.000.000 is comprised of houses sold at a different price, so this is where the concept of the weighted average is used.

4 houses were sold for 170.000 5 houses were sold for 200.000 6 houses were sold for X --------------------------------- 15 houses were sold for 370.000 + X

Using the formula for the mean: M=S/N 200.000 = (4*170.000 + 5*200.000 + 6*X) / 15 200.000*15 = 1.680.000 + 6X 3.000.000-1.680.000 = 6X 1.320.000 / 6 = X 220.000 = X ANS D

Re: The 15 homes in a new development are each to be sold for [#permalink]

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09 Jan 2017, 13:59

Hello from the GMAT Club BumpBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
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