Test 5 Section 4 Number 24
According to the table, Townsend Realty purchased the Glenview Street property for $140,000. This question tells us that $140,000 was actually a pretty heavily discounted price. They received both a 40% discount off the original price and another 20% discount for purchasing in cash. Let’s say the original price was x dollars.
A 40% discount off a price of x can be written like this: (1 – 0.4)x. Of course, we can simplify the expression in the parentheses: 0.6x.
To take another 20% off, we do a similar operation again, starting with that 0.6x: (1 – 0.2)(0.6x) = (0.8)(0.6x) = 0.48x.
So a 40% discount followed by a 20% discount off an original price of x dollars can be written as 0.48x. We know that the final price was $140,000, so we can solve for the original price:
0.48x = $140,000
x ≈ $291,667
That rounds to $291,700, which is choice B.
Putting all the math in one place for those who like it that way:
(1 – 0.4)(1 – 0.2)x = $144,000
(0.6)(0.8)x = $144,000
0.48x = $144,000
x ≈ 291,700