Source: Official Guide for the GMAT 13th Ed. Problem Solving; #135 Official Guide for the GMAT 2015 14th Ed. Problem Solving; #135

1

The price of lunch for 15 people

The price of lunch for 15 people was $207.00, including a 15 percent gratuity for service. What was the average price per person, EXCLUDING the gratuity?

3 Explanations

1

ELIANA LOPEZ CAICEDO

Why can't I say 207 less 15%? .85 * 207 = 175.9 and now divide this number by 15 that is equal to choice A?

Dec 11, 2015 • Comment

Sam Kinsman, Magoosh Tutor

That’s because 85% of 207 is not the same as the original price plus 15%! Let’s look at a more basic example:

Let’s say the price of a meal is $100 including a 50% gratuity. Using your method, we could do: $100 – (50% of 100) = $50. However, $50 is not the original price of the meal! The original price would be:

x * 1.5 = $100
x = $100 / 1.5
x = $66.67

So to solve this problem, we need to set it up such that the original price * 1.15 = $207. We can then work backwards to find the original price.

This concept is further explained here: http://magoosh.com/gmat/2012/understanding-percents-on-the-gmat/

Dec 14, 2015 • Reply

2

Isha ajmani

The average price per person, including the gratuity = 207/15 = 13.80

Now the average price excluding the gratuity = 13.80/1.15 = 1380/115 = 12

Jul 16, 2014 • Comment

, Magoosh Tutor

That's a smart approach too! :D

Jul 22, 2014 • Reply

3

Gravatar Mike McGarry, Magoosh Tutor

Dec 28, 2013 • Comment

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