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The purchase price of Beth's new car, including the sales tax, is $8,0

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The purchase price of Beth's new car, including the sales tax, is $8,0 [#permalink] The purchase price of Beth's new car, including the sales tax, is $8,0   31 Oct 2018, 12:31
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The purchase price of Beth's new car, including the sales tax, is $8,000. If she finances the car, making a down payment of $2,000 and paying off the rest in equal monthly installments, what will be the total cost of the car, including the sales tax and financing ?

(1) The installments are to be $200 per month.
(2) The installments will extend over a period of exactly 3 years
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dollytaneja51
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Re: The purchase price of Beth's new car, including the sales tax, is $8,0 [#permalink] The purchase price of Beth's new car, including the sales tax, is $8,0   31 Oct 2018, 13:09
Statement 1: just tells that $200 will be the installment per month... Not enough information to find out the total cost of the car including financing. Insufficient

Similarly, Statment 2: Gives information about the period till which installments need to be paid.. Insufficient

When we combine both statement, we get $9200 as the total cost of car where 1200 is financing

C is the answer

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The purchase price of Beth's new car, including the sales tax, is $8,0 [#permalink] The purchase price of Beth's new car, including the sales tax, is $8,0   14 Mar 2024, 09:35
dollytaneja51 I'm not understanding how Statement (1) is insufficient. If we know the amount paid for the car is $8,000 inclusive of taxes and the down payment is $2,000, wouldn't we then infer that $8,000-$2,000=$6,000 is being paid off in installment loans?

Then we could say that since the installments are $200/month, we'd have $6,000/$200=30 months to pay off the car. The cost would still be equal to $8,000 in this case, right? Maybe I'm just not understanding the problem correctly. Also, Statement (1) seems to contradict Statement (2), since 30 months=2.5 yrs, not 3 years. Usually not something we see in a DS problem.­
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Re: The purchase price of Beth's new car, including the sales tax, is $8,0 [#permalink] The purchase price of Beth's new car, including the sales tax, is $8,0   18 Mar 2024, 09:45
Bunuel, carcass,
Could you please explain how the answer is C and E ?

Clearly, I get St. 1 & 2 as not sufficient but both together also is not sufficient as we don't know the anything about financing %. It could be 0% , 5%, 10% etc. as financing.

My approach of St. 1 & 2. Combine :-
36 months * $200 = $7,200. During purchase of the car $8000 - $2000 = $6000 (balance amt). But paid $7,200, an extra $1,200. From this how to get the actual cost of the car ?
Do we need to back calculate to find the actual cost of the car ?­­
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Re: The purchase price of Beth's new car, including the sales tax, is $8,0 [#permalink] The purchase price of Beth's new car, including the sales tax, is $8,0   19 Mar 2024, 01:21
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kkannan2 wrote:
The purchase price of Beth's new car, including the sales tax, is $8,000. If she finances the car, making a down payment of $2,000 and paying off the rest in equal monthly installments, what will be the total cost of the car, including the sales tax and financing ?

(1) The installments are to be $200 per month.
(2) The installments will extend over a period of exactly 3 years

dollytaneja51 I'm not understanding how Statement (1) is insufficient. If we know the amount paid for the car is $8,000 inclusive of taxes and the down payment is $2,000, wouldn't we then infer that $8,000-$2,000=$6,000 is being paid off in installment loans?

Then we could say that since the installments are $200/month, we'd have $6,000/$200=30 months to pay off the car. The cost would still be equal to $8,000 in this case, right? Maybe I'm just not understanding the problem correctly. Also, Statement (1) seems to contradict Statement (2), since 30 months=2.5 yrs, not 3 years. Usually not something we see in a DS problem.­

­
The key issue is that financing the car entails paying more than the $8,000 total. Since she isn't paying the entire sum upfront, she'll be paying through monthly installments, which will result in paying more. This is why the first statement is insufficient - while we know the monthly installments, we don't know the duration of those payments.

Hope it helps 
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Re: The purchase price of Beth's new car, including the sales tax, is $8,0 [#permalink] The purchase price of Beth's new car, including the sales tax, is $8,0   19 Mar 2024, 01:24
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saswat1987 wrote:
Bunuel, carcass,
The purchase price of Beth's new car, including the sales tax, is $8,000. If she finances the car, making a down payment of $2,000 and paying off the rest in equal monthly installments, what will be the total cost of the car, including the sales tax and financing ?

(1) The installments are to be $200 per month.
(2) The installments will extend over a period of exactly 3 years

Could you please explain how the answer is C and E ?

Clearly, I get St. 1 & 2 as not sufficient but both together also is not sufficient as we don't know the anything about financing %. It could be 0% , 5%, 10% etc. as financing.

My approach of St. 1 & 2. Combine :-
36 months * $200 = $7,200. During purchase of the car $8000 - $2000 = $6000 (balance amt). But paid $7,200, an extra $1,200. From this how to get the actual cost of the car ?
Do we need to back calculate to find the actual cost of the car ?­­

When combining the statements, we get that she'll be paying $200 for exactly 36 months. That's all she'll pay. These payments, along with the $2,000 down payment, cover everything.­
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Re: The purchase price of Beth's new car, including the sales tax, is $8,0 [#permalink]
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