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23 March, 20:54

Assume you have an AMEX card which pays a 2% cash rebate on all purchases, and a VISA card which pays a 1% cash rebate on all purchases. Gas stations A and B both show a price of $2.00 per gallon, but station A does NOT accept AMEX cards while station B does. How much more expensive is the gas at station A assuming you use your VISA card instead of the AMEX card?

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  1. 23 March, 22:58
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    The gas at station A is $0.02 per gallon more expensive

    Explanation:

    Data provided in the question:

    Cash rebate provided by the AMEX card = 2%

    Cash rebate provided by the VISA card = 1%

    Price of the gas = $2.00 per gallon

    Now,

    Amount of rebate provided by the AMEX card per gallon = 2% of $2.00

    = 0.02 * 2.00

    = $0.04

    Amount of rebate provided by the VISA card per gallon = 1% of $2.00

    = 0.01 * 2.00

    = $0.02

    Since station A does not accept AMEX card

    Therefore, VISA card will be used at station A

    Thus,

    Rebate at station A = $0.02

    And rebate at station B = $0.04

    Difference in rebate = $0.04 - $0.02

    = $0.02

    Hence,

    The gas at station A is $0.02 per gallon more expensive
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