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Intern
Joined: 20 Oct 2009
Posts: 12

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03 Aug 2010, 04:50
00:00

Difficulty:

25% (medium)

Question Stats:

100% (01:23) correct 0% (00:00) wrong based on 9 sessions

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Three business people who wish to invest in a new company. Each person is willing to pay one third of the total investment. . After careful calculation, they realize that each of them would pay $7200 less if they could find two more equal investors. How much is the total investment in the new business. a)$ 64,000
b) $54,000 c)$ 21,000
d) $5,400 e)$3,600
[Reveal] Spoiler: OA

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Manager
Joined: 16 Apr 2010
Posts: 214

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03 Aug 2010, 05:25
Hi,

Initially each invest in x. Hence total investment is 3x.
Total investment is also 5(x-7200).

3x = 5(x-7200)
x= 5*7200/2 = 18000
3x = 54000 and the answer is B.

regards,
Jack

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Manager
Joined: 03 Jun 2010
Posts: 171

Kudos [?]: 71 [0], given: 40

Location: United States (MI)
Concentration: Marketing, General Management

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04 Aug 2010, 04:37
x - total investment
3*x/3 = 5*(x/3-7200)

x=54000
(B)

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Ms. Big Fat Panda
Status: Three Down.
Joined: 09 Jun 2010
Posts: 1915

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Concentration: General Management, Nonprofit

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04 Aug 2010, 10:44
Other wrote:
Three business people who wish to invest in a new company. Each person is willing to pay one third of the total investment. . After careful calculation, they realize that each of them would pay $7200 less if they could find two more equal investors. How much is the total investment in the new business. a)$ 64,000
b) $54,000 c)$ 21,000
d) $5,400 e)$3,600

Let us assume that the total investment is X. So initially each investor is willing to pay

If they find two more partners, the new level of investment becomes $$\frac{X}{5}$$

We are told that:

$$\frac{X}{3}$$ = $$\frac{X}{5} + 7200$$

$$\frac{X}{3} -\frac{X}{5} = 7200$$

$$\frac{2X}{15} = 7200$$

$$X = \frac{7200*15}{2} = 54000$$

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Senior Manager
Status: Time to step up the tempo
Joined: 24 Jun 2010
Posts: 404

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Location: Milky way
Schools: ISB, Tepper - CMU, Chicago Booth, LSB

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08 Aug 2010, 19:48

$$x/3 - x/5$$ = 7200
$$2x/15$$ = 7200

x = 54000
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