by: bb
50 mins
by: WA
2 hrs
Events & Promotions
|
|
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
Track
Your Progress
Practice
Pays
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
Sep 1507:00 PM EDT
-09:00 PM EST
Elite scores are possible when you enroll in a powerful GMAT course, taught live online + 6 months access to TTP OnDemand video courses included! Class starts Tues/Thurs Sept. 15, 2026 - Nov. 15, 2027, 7:00pm-9:00pm EST
Sep 2107:00 PM EDT
-10:00 PM EDT
Boost your GMAT score in less than one month in a live online class + 6 months access to TTP OnDemand video courses included!
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
95%
(hard)
Question Stats:
36% (03:12) correct
64%
(03:27)
wrong
based on 666
sessions
History
Date
Time
Result
Not Attempted Yet
A customer using a certain telephone calling plan pays a fee of $25 per month, and then receives a discount of 40% on the regular charge for all calls made to country A. If calls to country A are regularly charged at $1.60 per minute for the first 3 minutes, and $0.80 per minute for each minute thereafter, what is the maximum the customer could have saved over regular prices if he was charged for 1 hour of calls made to country A in a certain month?
A. $8.75
B. $12
C. $13.40
D. $17.40
E. $24.40
A. $8.75
B. $12
C. $13.40
D. $17.40
E. $24.40
gayathri
Like the other poster pointed out, the key is, what is the MAX the customer could have saved using the savings plan? Well, you save the most (in absolute dollar terms) by incurring the biggest phone bill possible. And how do you do that? You call for 3 minutes (get charged at $1.60 per minute) hang up, and then do that 20 times, since the question said you must talk for 1 hour.
So you are charged 1.60 per minute for 60 minutes = 96. This is what it normally costs you with no discount.
If you have the discount, you have to pay the $25 connection fee BUT you only pay 60% of the phone bill (40% savings): 0.6 * 96 = 57.6. So the total comes out to $25 + $57.6 = $82.6
So you save $96 - $82.6 = $13.4 or answer choice (3)
Posts: 997
A customer using a certain telephone calling plan
Regular call charges to country A
what is the maximum the customer could have saved over regular prices if he was charged for 1 hour of calls made to country A in a certain month?
for maximum he could have saved, we need find max he could have spent without having a plan.
so we assume all calls are of duration less than 3 minutes i.e., charge is 1.6 per min.
we have an hour thus 60 minutes.
charge=60*1.6=96
charge after applying the discount=\(96*(1-\frac{40}{100})\)=57.6
plan fee=25
Total charges=25+57.6=82.6
Regular total charge as calculated above could have been 96-82.6=13.4
- pays a fee of $25 per month
- receives a discount of 40% on the regular charge for all calls made to country A.
Regular call charges to country A
- $1.60 per minute for the first 3 minutes, and
$0.80 per minute for each minute
what is the maximum the customer could have saved over regular prices if he was charged for 1 hour of calls made to country A in a certain month?
for maximum he could have saved, we need find max he could have spent without having a plan.
so we assume all calls are of duration less than 3 minutes i.e., charge is 1.6 per min.
we have an hour thus 60 minutes.
charge=60*1.6=96
charge after applying the discount=\(96*(1-\frac{40}{100})\)=57.6
plan fee=25
Total charges=25+57.6=82.6
Regular total charge as calculated above could have been 96-82.6=13.4
General Discussion
TheLostBear
Joined: 23 Apr 2016
Last visit: 26 Mar 2024
Posts: 12
Location: United States
Concentration: Finance, Economics
Posts: 12
Nevernevergiveup
Hi Nevernevergiveup,
I understand that the most expensive way is making continuous 3-minute calls until you get to 60 minutes. However, using the monthly plan, the cheapest way to call is to call 1 hour straight and pay total of 25 + 40%*(1.6*3 + 0.8*57) = 45.16.
So, the maximum saving would be 96 - 45.16 = 50.84, would it not? I understand it is not an answer choice, but I think that how you must interpret the question.
gayathri
Discount = 40% of spending
We want to maximise discount so we will need to maximise spending. We do that by assuming that 60 calls were made of 1 min each because the first minute is the most expensive.
Max discount = (40/100)* 60 * 1.6 = (40/100)*96
This would be slightly less than 40. About 38 to 39.
Saving = (Slightly less than 40) - 25 = Slightly less than 15
Answer (C)
_________________
-
Start FREE with selected GMAT/EA Content upon registration at anaprep.com
YouTube Channel: karishma.anaprep
Start FREE with selected GMAT/EA Content upon registration at anaprep.com
YouTube Channel: karishma.anaprep
TheLostBear
Joined: 23 Apr 2016
Last visit: 26 Mar 2024
Posts: 12
Location: United States
Concentration: Finance, Economics
Posts: 12
VeritasPrepKarishma
Hi Karishma,
I posted my issue with the answer to this question already, but I was hoping you could help clarify. I understand that the most expensive way is making continuous 3-minute calls until you get to 60 minutes. However, using the monthly plan, the cheapest way to call is to call 1 hour straight and pay total of 25 + 40%*(1.6*3 + 0.8*57) = 45.16.
So, the maximum saving would be 96 - 45.16 = 50.84, would it not? I understand it is not an answer choice, but I think that how you must interpret the question.
Thank you.
TheLostBear
Hi,
But in that case the initial expenditure will not be 96 but (1.6*3 + 0.8*57) = 50.4.....
so the saving is 50.4 - 45.16 nearly 5....
As the savings are 40% of expenditure, we have to make the expenditure the MAX, so we take that each call was of 1 minute each and he paid 1.6 * 60 = 96..
and then due to the plan he had to pay 25 + .6*96 = 57.6 +25 = 82.6..
and savings = 96-82.6 = 13.4
_________________
you paid $25 to get the 40% discount plan. So you will spend maximum amount to utilize the plan.
your target is to get max bill. and that will achieved by talking at maximum rates( 3 minutes talk per call). if you talk more than 3 minutes you will be charged less.
to get max bill you will made at least 20 call of 3 minutes each.
monthly bill without plan-
=1.6*3*20
=96-----------(1)
monthly bill with discount plan-
= 96*0.6(40% discount)
=57.6---------(2)
savings= (1)-(2)
=96-57.6
=38.4------------(3)
but you already paying $25 for the plan
max savings= 38.4-25
=13.4
answer is (c)
your target is to get max bill. and that will achieved by talking at maximum rates( 3 minutes talk per call). if you talk more than 3 minutes you will be charged less.
to get max bill you will made at least 20 call of 3 minutes each.
monthly bill without plan-
=1.6*3*20
=96-----------(1)
monthly bill with discount plan-
= 96*0.6(40% discount)
=57.6---------(2)
savings= (1)-(2)
=96-57.6
=38.4------------(3)
but you already paying $25 for the plan
max savings= 38.4-25
=13.4
answer is (c)
Kinshook
Major Poster
Joined: 03 Jun 2019
Last visit: 15 Sep 2026
Posts: 6,131
Location: India
Schools: HBS '28 CBS '26 Wharton '26
GMAT 1: 690 Q50 V34
WE:Engineering (Transportation)
Products:
A customer using a certain telephone calling plan pays a fee of $25 per month, and then receives a discount of 40% on the regular charge for all calls made to country A.
If calls to country A are regularly charged at $1.60 per minute for the first 3 minutes, and $0.80 per minute for each minute thereafter, what is the maximum the customer could have saved over regular prices if he was charged for 1 hour of calls made to country A in a certain month?
Maximum calls bill possible = $1.6*60 = $96
Maximum discount possible = 40%*$96 = $38.4
Maximum amount saved = $38.4 - $25 =$13.40
IMO C
If calls to country A are regularly charged at $1.60 per minute for the first 3 minutes, and $0.80 per minute for each minute thereafter, what is the maximum the customer could have saved over regular prices if he was charged for 1 hour of calls made to country A in a certain month?
Maximum calls bill possible = $1.6*60 = $96
Maximum discount possible = 40%*$96 = $38.4
Maximum amount saved = $38.4 - $25 =$13.40
IMO C
Moderator:
Announcements
Monday, Sep 14, 2026
11:30am NY / 3:30pm London / 9pm Mumbai
Subscribe to GMAT Club for New Podcast Episodes, Debriefs, & Insightful Sessions on GMAT Preparation
Tuck at Dartmouth
AI at Dartmouth Tuck: How the School Is Preparing Leaders for the Age of Artificial Intelligence
Inside the courses, research, and hands-on learning defining wise, decisive leadership in an AI-driven world.
Read More
Inside the courses, research, and hands-on learning defining wise, decisive leadership in an AI-driven world.
Read More
Top 5 GMAT Debrief Videos
Success stories and strategies from high-scoring candidates.