GMAT paper test 55, # 10

[GUEST]

Can anyone show me his/her approach to this problem:

Ann can have her bicycle repaired for $50, or she can trade it in, as is, and receive $22 credit toward the purchase of a new bicycle that sells for $107. If Ann trades in her current bicycle, the cost to her of purchasing the new bicycle is what percent greater than the cost of having her current bicycle repaired?

A) 44%
B) 60%
C) 70%
D) 114%
E) 170%

[Harish Dorai]

Is the answer (C) = 70%?

The approach is:

Cost for repair = $50.
Cost of buying a new cycle = $107 - $22 (Price of the cycle - Trade in value for the old cycle) = $85

Percentage increase = (85 - 50)/50
= 0.7 which is 70%.

[JadranLee]

That's right, Harish.

-Jad

Is the answer (C) = 70%?

The approach is:

Cost for repair = $50.
Cost of buying a new cycle = $107 - $22 (Price of the cycle - Trade in value for the old cycle) = $85

Percentage increase = (85 - 50)/50
= 0.7 which is 70%.

[Katie]

I'm slightly confused. . .why do you divide by 50? Thanks!

That's right, Harish.

-Jad

Is the answer (C) = 70%?

The approach is:

Cost for repair = $50.
Cost of buying a new cycle = $107 - $22 (Price of the cycle - Trade in value for the old cycle) = $85

Percentage increase = (85 - 50)/50
= 0.7 which is 70%.

[StaceyKoprince]

If this is from an officially released paper test, please cite "official paper test" or "GMAC paper test" - we actually have to cite the author for copyright reasons.

[Harish Dorai]

The reason why we are dividing by 50 is because, we are trying to find the percent increase relative to the cost of repairing the bicycle which is $50.

[guest]

Yes, to confirm, this problem is from the GMAC paper test.