A company received $2 million in royalties on the first$10 million : GMAT Problem Solving (PS)
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# A company received $2 million in royalties on the first$10 million

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A company received $2 million in royalties on the first$10 million [#permalink]

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25 May 2010, 09:19
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Hi guys. This example was used on the iPhone app. I was confused but it may be a misteak. Can someone solve it with explantion.

A company received $2 million in royalties on the first$10 million in sales and then $8 million in royalties on the next$100 million in sales. By what percent did the ratio of royalties to sales decrease from the first $10 million in sales to the next$100 million in sales?
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Re: A company received $2 million in royalties on the first$10 million [#permalink]

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25 May 2010, 09:33
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Hi,

the question is:
"By what (percent) did the (ratio of royalties to sales) (decrease) from the first to next"

First find out (ratio of royalties to sales):
2:10 First
0.2
8:100 Second
0.08

Decrease = 0.2-0.08 = 0.12

Percent = (0.12/0.20) = 60%.

Hope this helps.

rgds Anirudh
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Re: A company received $2 million in royalties on the first$10 million [#permalink]

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25 May 2010, 09:38
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Jinglander wrote:
Hi guys. This example was used on the iPhone app. I was confused but it may be a misteak. Can someone solve it with explantion.

A company received $2 million in royalties on the first$10 million in sales and then $8 million in royalties on the next$100 million in sales. By what percent did the ratio of royalties to sales decrease from the first $10 million in sales to the next$100 million in sales?

General formula for percent increase or decrease, (percent change): $$Percent=\frac{Change}{Original}*100$$

Solution: Percent decrease can be calculated by the formula above:
$$Percent=\frac{Change}{Original}*100=$$
$$=\frac{\frac{2}{10}-\frac{8}{100}}{\frac{2}{10}}*100=60%$$, so the royalties decreased by 60%.

If there is another solution in app then there must be a typo.
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Re: A company received $2 million in royalties on the first$10 million [#permalink]

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25 May 2010, 09:40
Bunuel wrote:
Jinglander wrote:
Hi guys. This example was used on the iPhone app. I was confused but it may be a misteak. Can someone solve it with explantion.

A company received $2 million in royalties on the first$10 million in sales and then $8 million in royalties on the next$100 million in sales. By what percent did the ratio of royalties to sales decrease from the first $10 million in sales to the next$100 million in sales?

General formula for percent increase or decrease, (percent change): $$Percent=\frac{Change}{Original}*100$$

Solution: Percent decrease can be calculated by the formula above:
$$Percent=\frac{Change}{Original}*100=$$
$$=\frac{\frac{2}{10}-\frac{8}{100}}{\frac{2}{10}}*100=60%$$, so the royalties decreased by 60%.

If there is another solution in app then there must be a typo.

Yep typo. As a side note on the app some times for percent increase they will get a 2.9 and then say the increase is 190% can you explain
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Joined: 02 Sep 2009
Posts: 36520
Followers: 7066

Kudos [?]: 92918 [0], given: 10528

Re: A company received $2 million in royalties on the first$10 million [#permalink]

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25 May 2010, 09:50
Jinglander wrote:
Bunuel wrote:
Jinglander wrote:
Hi guys. This example was used on the iPhone app. I was confused but it may be a misteak. Can someone solve it with explantion.

A company received $2 million in royalties on the first$10 million in sales and then $8 million in royalties on the next$100 million in sales. By what percent did the ratio of royalties to sales decrease from the first $10 million in sales to the next$100 million in sales?

General formula for percent increase or decrease, (percent change): $$Percent=\frac{Change}{Original}*100$$

Solution: Percent decrease can be calculated by the formula above:
$$Percent=\frac{Change}{Original}*100=$$
$$=\frac{\frac{2}{10}-\frac{8}{100}}{\frac{2}{10}}*100=60%$$, so the royalties decreased by 60%.

If there is another solution in app then there must be a typo.

Yep typo. As a side note on the app some times for percent increase they will get a 2.9 and then say the increase is 190% can you explain

This is correct: x is increased by y percent can be expressed as x*(1+y/100). So 190% increase is (1+1.9)=2.9 times increase. This is the same as if we are told that something increased by 100% it would mean that it increased 2 times.
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Re: A company received $2 million in royalties on the first$10 million [#permalink]

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25 May 2010, 10:14
how can you take x*(1+y/100) and put it in the firm x-y/x
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Re: A company received $2 million in royalties on the first$10 million [#permalink]

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25 May 2010, 10:32
Jinglander wrote:
how can you take x*(1+y/100) and put it in the firm x-y/x

Consider this:
Price of an apple was 1$and now price is 1.5$. What was the percent increase in price?

$$Percent=\frac{Change}{Original}*100=\frac{1.5-1}{1}*100=50%$$, the price increased by 50%, which is the same as to say that the price increased 1.5 times. So 50% increase = increase by (1+50/100)=1.5 times.

Hope it's clear.
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Re: A company received $2 million in royalties on the first$10 million [#permalink]

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16 Sep 2015, 00:30
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Re: A company received $2 million in royalties on the first$10 million   [#permalink] 16 Sep 2015, 00:30
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