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For company A, the amount profit earned in 1991 increased by [#permalink]

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22 May 2005, 09:40

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For company A, the amount profit earned in 1991 increased by 20 percent than the year before and in 1992 increased 20 percent than the year before. For company B, the profit of 1991 increased by 40 percent than 1990 and in 1992, increased by 1 percent than 1991.If x expressed the percentage the total profit of A and B increased in 1991 and y expressed the percentage the total profit of A and B increased in the 1992. Which of the following is the relation between x and y?

For company A, the amount profit earned in 1991 increased by 20 percent than the year before and in 1992 increased 20 percent than the year before. For company B, the profit of 1991 increased by 40 percent than 1990 and in 1992, increased by 1 percent than 1991.If x expressed the percentage the total profit of A and B increased in 1991 and y expressed the percentage the total profit of A and B increased in the 1992. Which of the following is the relation between x and y?

In my opinion, the quantity "total profit of A and B" is unmeasurable, because we don't know either the starting or ending relative values of profits of A and B. Thus, we just know that if A was A's profit in 1990, it was 1.2A in 1991 and 1.44A in 1992. Similarly, B's profit was B in 1990, 1.4B in 1991, and 1.414 in 1992. This still would not give us total profit, because we don't know the relative sizes of A and B.

Assuming equal (and I'd be very reluctant to make this assumption),
x is average of 0.2 + 0.4 = 0.3 = 30%, and
y is average of 0.2 and 0.01 = 0.105 = 10.5%
Obviously, x-y > 2.
_________________

The way I will approach this problem is as follows.

Since this is a percentage question where we have no idea what A & B are we can safely assume A & B to be 100
1991 1992
A's increase 20 24 (20% of 120)

B's increase 40 1.4 (1% of 140)

Total x=60 y=25.4

Since x & y are percentages, we can divide the above by 100 to get the sum of percentage increase for each year.

Converting it x=0.60 y=0.254
to percentage

Therefore, x-y= 0.60 - 0.254=0.346 > 2. Hence x-y > 2. Hence choice 1 should be correct.
_________________

For company A, the amount profit earned in 1991 increased by 20 percent than the year before and in 1992 increased 20 percent than the year before. For company B, the profit of 1991 increased by 40 percent than 1990 and in 1992, increased by 1 percent than 1991.If x expressed the percentage the total profit of A and B increased in 1991 and y expressed the percentage the total profit of A and B increased in the 1992. Which of the following is the relation between x and y?

For company A, the amount profit earned in 1991 increased by 20 percent than the year before and in 1992 increased 20 percent than the year before. For company B, the profit of 1991 increased by 40 percent than 1990 and in 1992, increased by 1 percent than 1991.If x expressed the percentage the total profit of A and B increased in 1991 and y expressed the percentage the total profit of A and B increased in the 1992. Which of the following is the relation between x and y?