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Bobby bought two shares of stock which he sold for $96 each. [#permalink]
25 Nov 2007, 19:56
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Bobby bought two shares of stock which he sold for $96 each. If he had a profit of 20% on the sale of one the shares but a loss of 20% on the sale of the other share, then on the sale of both shares combined, Bobby had
A: A profit of $10
B: A profit of $8
C: A loss $8
D: A loss of $10
E: Neither a profit / loss
you know right away that the answer is going to be either C or D since he will lose money. If he loses 20% of a number to get to $96 he will be losing more money than the 20% gained from a smaller number. This is just common sense because 20% of a larger number is more than 20% of a smaller number. The rest is finding the exact loss.
1.2x = 96
x = 80
gain of $16
.8x = 96
x = 120
loss of $24
16 - 24 = -8 or a loss of $8
sorry if the explanation is kind of week. I have a tendency to "just solve" problems without thinking of the steps, so it's hard to explain my logic sometime.