devinawilliam83 wrote:

kostyan5 wrote:

Assume trader started with X amount of money. After buying, he had 1.2X. After selling he had 1.25(1.2X) = 1.5X. So he made 50%.

The logic i was using was as follows :

original Price (OP) was 100 units @ 1/- . OP= 100/-

Buying price - 120 units for 100/- (he used false measures, hence reducing the quantitiy and not the amount)

selling price - 90 units for 100/-

Gain = SP-BP = (100/90) - (100/120) = 10/36

Gain% is gain/BP = (10/36)/(100/90) = 25%

What is wrong with what I am doing ?Thanks in advance

I will tell you the direct method of doing this but first let me explain what's wrong with your method.

Remember that the gain is in terms of money, not in terms of units.original Price (OP) was 100 units @ 1/- . OP= $100/-

Buying price - 120 units for $100/- (he used false measures, hence reducing the quantitiy and not the amount)

The value of 120 units is $120 so his gain is $20/$100 = 25%selling price - 90 units for 100/-

Gain = SP-BP = (100/90) - (100/120) = 10/36

Gain% is gain/BP = (10/36)/(100/90) = 25%When he sells, he gains 25% by using false measures.

For $100, he should have given the customer 100 units but he gives only 80 units to get a 25% gain.

His cost price of 80 units is $80 and selling price is $100 so gain = 20/80 * 100 = 25%

So he sells 80 units for $100

He will sell 120 units for $(100/80) * 120 = $150

How much did he pay for these 120 units? Only $100 (again because he used false measures)

Gain = (50/100) *100= 50%

You can also do this directly. There are 2 consecutive gains -> 20% and 25%

Overall gain = a + b + ab/100 = 20 + 25 + 20*25/100 = 50%

To check out how we arrive at this formula, see:

http://www.veritasprep.com/blog/2011/02 ... e-changes/ _________________

Karishma

Veritas Prep | GMAT Instructor

My Blog

Get started with Veritas Prep GMAT On Demand for $199

Veritas Prep Reviews