Logical ReasoningDifficulty: Easy

PT129 S2 Q3 Explanation

MetroBank made loans to ten

A free, expert breakdown of this official LSAT Logical Reasoning question.

TopicsParadox

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Stimulus

MetroBank made loans to ten small companies, in amounts ranging from $1,000 to $100,000. These ten loans all had graduated payment plans, i.e., the scheduled monthly loan payment increased slightly each month over the five-year term of the loan. Nonetheless, the average payment decreased by the end of the five-year term.

What this question is testing

Paradox

Your task

Break the argument into its conclusion and evidence, then do exactly what the question stem asks with that structure.

Common trap

Answers that sound relevant to the topic but don't connect to the argument's actual reasoning.

Winning move

Predict what a right answer must do, then test each choice against the conclusion-evidence gap.

Reading along? Open the full official question in LawHub — we show a fragment here and keep the reasoning in our own words.

The question
3.

Which one of the following, if true, most helps to resolve the apparent discrepancy in

Answer choices

  1. Out of Scope2% picked this

    The number of small companies receiving new loans from MetroBank increased over

    The issue is the payment amount from the ten small companies. New companies are not relevant.

  2. Out of Scope1% picked this

    Several of the ten small companies also borrowed money from

    This has nothing to do with the payments made to MetroBank.

  3. Out of Scope0% picked this

    Most banks offer a greater number of loans for under $100,000 than

    What other banks do is not relevant to the payments being made to MetroBank.

  4. Correct92% picked this

    Of the ten small companies, the three that had borrowed the largest amounts paid off their

    Why this is right

    If only 7 loans remained at the end of the five-year term, then even though those 7 loans were each paying a higher monthly payment than they had in the past, the average payment collected for the ten loans could be lower. Let's say all ten loans started with companies needing to pay back $1,000 per month. The average payment collected for the ten loans would be $1,000. If by the end of the five years, the seven remaining loans are up to $1,200 / month but the other three loans (which are paid off) are now submitting $0 / month, the average payment collected on the ten loans would be $840. ($1,200 * 7 = $8400 in total, divided by ten)

    Skill tested: Paradox · how this choice captures the argument's function is the move to repeat next time.

  5. Out of Scope5% picked this

    For some loans made by MetroBank, the monthly payment decreases slightly over the term

    These loans are not the loans made to the ten small companies because they all had graduated payments where the payment increases over time.

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