At a certain supplier, a machine of type A costs $20,000 and a machine of type B costs $50,000. Each machine can be purchased by making a 20 percent down payment and repaying the remainder of the cost and the finance charges over a period of time. If the finance charges are equal to 40 percent of the remainder of the cost, how much less would 2 machines of type A cost than 1 machine of type B under this arrangement?
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Thanks, this one was tricky because of the finance charges. I initially forgot to add the finance charges to the remainder. Once I did that, it made sense.
Same here! I almost picked 12,000 because I only did the down payment difference. Glad I caught it.
How do you handle the finance charges? Is it 40% of the remainder after down payment? I got confused about whether the finance charges are on the full cost or just the remainder.
Yes, the problem says 'finance charges are equal to 40 percent of the remainder of the cost', so it's on the remainder after down payment.
Thanks! That clears it up.
I found this one a bit challenging because of the wording. Had to read it twice to understand that the finance charges are part of the total cost. But after setting up the equations, it was fine.
What it tests
Your ability to compute percentage change, percentage of a whole, and to work backwards from a final value.
Common trap
Treating successive percentage changes as additive — a 10% rise then a 10% fall is not back to the start.