Last visit was: 24 Apr 2026, 07:29 It is currently 24 Apr 2026, 07:29
Home
Messages
Tests
Schools
Events
Close
GMAT Club Daily Prep
Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
Go to My Error Log Learn more
Close
Request Expert Reply
Confirm Cancel
Back to Forum
Create Topic
555-605 (Medium)|   Math Related|               
User avatar
amirsalehi
User avatar
Joined: 01 Mar 2014
Last visit: 02 Jun 2015
Posts: 5
Own Kudos:
38
 [37]
Given Kudos: 12
GMAT Date: 05-23-2014
Posts: 5
Kudos: 38
 [37]
Radhika is refinancing a business loan and is considering 2 different Updated on: 12 Jun 2024, 01:46
Originally posted by amirsalehi on 23 Aug 2014, 11:09.
Last edited by Bunuel on 12 Jun 2024, 01:46, edited 10 times in total.
5
Kudos
Add Kudos
32
Bookmarks
Bookmark this Post
00:00
Start Timer
Pause Timer
Resume Timer
Show Answer
Hide Answer
Hide
Show
History
Principal remaining after
12 months under Offer 1: $175,000 Principal remaining after
12 months under Offer 2: $172,700
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!

Difficulty:

25% (medium)

Question Stats:

82% (02:26) correct 18% (02:50) wrong based on 1976 sessions

History

Date
Time
Result
Not Attempted Yet
Radhika is refinancing a business loan and is considering 2 different loan offers. Under Offer 1, the loan’s initial principal would be $190,000, and she would pay down $1,250 in principal with each monthly payment during the first year of the loan. Under Offer 2, $4,000 in refinancing fees would be added to bring the principal to $194,000, but she would pay down $1,775 in principal with each monthly payment during the first year of the loan.

In the first column of the table, select the amount of principal that would remain after 12 monthly payments under Offer 1. In the second column of the table, select the amount of principal that would remain after 12 monthly payments under Offer 2. Make only two selections, one in each column.­

Show Spoiler
ID: 100322
Principal remaining after
12 months under Offer 1 		Principal remaining after
12 months under Offer 2 		Amount
$168,700
$171,000
$172,700
$175,000
$176,700
$179,000
Submit Answer
Start the Timer above, select the radio buttons, and click "Submit" to add this question to your Error log.
ShowHide Answer
Official Answer
Principal remaining after
12 months under Offer 1: $175,000 Principal remaining after
12 months under Offer 2: $172,700
If this question felt shaky, try an adaptive mini quiz of similar problems in GMAT Club Forum Quiz →. Free plan gives 5 questions per day.
Most Helpful Reply
User avatar
Shrivathsan
User avatar
Joined: 15 Apr 2016
Last visit: 07 Feb 2018
Posts: 50
Own Kudos:
145
 [12]
Given Kudos: 66
Posts: 50
Kudos: 145
 [12]
Radhika is refinancing a business loan and is considering 2 different 27 Jun 2016, 21:05
10
Kudos
Add Kudos
2
Bookmarks
Bookmark this Post
wadbarzain
Radhika is refinancing a business loan and is considering 2 different loan offers. Under Offer 1, the loan's initial principal would be $190,000, and she would pay down $1,250 in principal with each monthly payment during the first year of the loan. Under Offer 2, $4,000 in refinancing fees would be added to bring the principal to $194,000, but she would pay down $1,775 in principal with each monthly payment during the first year.

In the first column of the table, select the amount of principal that would remain after 12 monthly payments under Offer 1. In the second column of the table, select the amount of principal that would remain after 12 monthly payments under Offer 2. Make only two selections, one in each column.

$168,700
$171,000
$172,700
$175,000
$176,700
$179,000


Show Spoiler
Offer 1: $175,000 Offer 2: $172,700
Show more


Pretty simple Q.
Offer 1 :
P=1250 ; months : 12 ; amount to repay : 190000
amount remain after 12 months.
190000-(12*1250) = 175000

Offer 2 :
P=1775; months : 12 ; amount to repay : 194000
amount remain after 12 months.
194000-(12*1775) = 172700

--------------------------------
Shrivathsan
General Discussion
User avatar
marciful
User avatar
Joined: 06 Sep 2012
Last visit: 29 Sep 2014
Posts: 4
Own Kudos:
166
 [2]
Schools: Stanford '17
Schools: Stanford '17
Posts: 4
Kudos: 166
 [2]
Radhika is refinancing a business loan and is considering 2 different 24 Aug 2014, 09:53
2
Kudos
Add Kudos
Bookmarks
Bookmark this Post
amirsalehi
Hi there,
Can anyone help me with this IR question?
Show more

Offer 1 Offer 2
190,000 Principal 194,000
1,250 Monthly Principal Payments 1,775
15,000 Total Principal Payments after Year 1 21,300
175,000 Principal remaining after Year 1 172,700
User avatar
Apt0810
User avatar
Joined: 15 Jul 2018
Last visit: 24 Oct 2020
Posts: 323
Own Kudos:
667
 [1]
Given Kudos: 94
Posts: 323
Kudos: 667
 [1]
Radhika is refinancing a business loan and is considering 2 different 19 Oct 2019, 09:41
1
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Option 1: Amount remaining after 1 year = 190000-(12*1250) = 175000

Option 2:Amount remaining after 1 year = 194000-(12*1775) = 172700

Posted from my mobile device
User avatar
TheNightKing
User avatar
Joined: 18 Dec 2017
Last visit: 20 Mar 2024
Posts: 1,124
Own Kudos:
1,381
 [1]
Given Kudos: 421
Location: United States (KS)
GMAT 1: 600 Q46 V27
GMAT 1: 600 Q46 V27
Posts: 1,124
Kudos: 1,381
 [1]
Radhika is refinancing a business loan and is considering 2 different 19 Oct 2019, 16:38
1
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Quote:

Radhika is refinancing a business loan and is considering 2 different loan offers. Under Offer 1, the loan's initial principal would be $190,000, and she would pay down $1,250 in principal with each monthly payment during the first year of the loan. Under Offer 2, $4,000 in refinancing fees would be added to bring the principal to $194,000, but she would pay down $1,775 in principal with each monthly payment during the first year.

In the first column of the table, select the amount of principal that would remain after 12 monthly payments under Offer 1. In the second column of the table, select the amount of principal that would remain after 12 monthly payments under Offer 2. Make only two selections, one in each column.

A. $168,700
B. $171,000
C. $172,700
D. $175,000
E. $176,700
F. $179,000
Show more

Offer 1 :
Principal Amount = 1,90,000
Per Month = 1250
12 Months = 12*1250=12500+2500=15000
Balance = 190000-15000 = 175000

Offer 2 :
Principal Amount = 1,94,000
Per Month = 1775
12 Months = 12*1775=17750+3550=21,300
Balance = 194000-21300 = 1,72,700

So Option D and option C.
User avatar
ishitaz
User avatar
Joined: 25 Aug 2020
Last visit: 02 Oct 2025
Posts: 7
Own Kudos:
5
 [1]
Given Kudos: 119
Posts: 7
Kudos: 5
 [1]
Radhika is refinancing a business loan and is considering 2 different 08 Nov 2020, 04:14
1
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Hi, one doubt. Why didn't we include refinance fees in the principal as mentioned in the question for Offer2?
avatar
Ansh13
avatar
Current Student
Joined: 30 Nov 2019
Last visit: 28 Jan 2022
Posts: 46
Own Kudos:
9
 [2]
Given Kudos: 27
Location: India
Schools: Tuck '24 (A) Fuqua '24 (I) Tepper '24 (A) Rotman '24 (D) Johnson '24 (A)
GMAT 1: 750 Q50 V40
GPA: 3.52
WE:Information Technology (Consulting)
Schools: Tuck '24 (A) Fuqua '24 (I) Tepper '24 (A) Rotman '24 (D) Johnson '24 (A)
GMAT 1: 750 Q50 V40
Posts: 46
Kudos: 9
 [2]
Radhika is refinancing a business loan and is considering 2 different 10 Nov 2020, 12:46
2
Kudos
Add Kudos
Bookmarks
Bookmark this Post
ishitaz
Hi, one doubt. Why didn't we include refinance fees in the principal as mentioned in the question for Offer2?
Show more
ishitaz - The refinance fees is already added in the principal in Offer 2. The principal amount of $194,000 in Offer 2 is inclusive of the $4000 refinancing fees. The questions says -
Quote:
....Under Offer 2, $4,000 in refinancing fees would be added to bring the principal to $194,000, but she would....
Show more
This means that the $4000 refinancing fees when added to the principal, brings the total value of principal to $194,000.

Hope that clears your doubt.
avatar
scranjith
avatar
Joined: 09 Jan 2021
Last visit: 10 Sep 2021
Posts: 29
Own Kudos:
16
Given Kudos: 34
Posts: 29
Kudos: 16
Radhika is refinancing a business loan and is considering 2 different 04 Mar 2021, 09:03
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Offer 1: Amount remaining after 1 year = 190000-(12*1250) = 175000

Offer 2: Amount remaining after 1 year = 194000-4000-(12*1775) = 168700

Posted from my mobile device
User avatar
surya4
User avatar
Joined: 01 Oct 2023
Last visit: 22 Apr 2026
Posts: 3
Own Kudos:
1
Given Kudos: 239
Products:
Forum Quiz
Posts: 3
Kudos: 1
Radhika is refinancing a business loan and is considering 2 different 15 Jun 2025, 09:26
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Do you have any suggestions on how to reduce the time spent here? I can solve questions like this, but it's taking me around 3-4 minutes. The most significant part of the time is spent on comprehension.
User avatar
cheshire
User avatar
DI Forum Moderator
Joined: 26 Jun 2025
Last visit: 18 Sep 2025
Posts: 261
Own Kudos:
300
Given Kudos: 34
Posts: 261
Kudos: 300
Radhika is refinancing a business loan and is considering 2 different 27 Jun 2025, 16:31
Kudos
Add Kudos
Bookmarks
Bookmark this Post
If your struggling with comprehension i would recommend when reading the prompt, don’t aim to absorb every detail at once.

In this instance focus on these in your first pass:

-Initial Values - "The loans initial principal would be"

-Monthly Changes - "...she would pay down $X in principal with each monthly payment..."

-Extra conditions or agreements - "...$4,000 in refinancing fees would be added..."


After this, jot down simple variables (e.g., O1: 190k, -1250/mo; O2: 190k+4k, -1775/mo)
This helps lock in the structure of the question before getting distracted by options.


Also, memorize formulas so you can more quickly get into the math. In this case: Remaining=Initial principal−(monthly payment×12)
While it might seem simple to figure them out on a question by question basis, remembering them can streamline the solving process.
surya4
Do you have any suggestions on how to reduce the time spent here? I can solve questions like this, but it's taking me around 3-4 minutes. The most significant part of the time is spent on comprehension.
Show more
Moderators:
Bunuel
Math Expert
109814 posts
kingbucky
498 posts
Gmat860sanskar
212 posts