Find all School-related info fast with the new School-Specific MBA Forum

It is currently 22 Oct 2014, 22:43

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

If a trader, by means of false measures, gains 20% while buy

  Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:
Current Student
User avatar
Joined: 25 Aug 2011
Posts: 195
Location: India
GMAT 1: 730 Q49 V40
WE: Operations (Insurance)
Followers: 1

Kudos [?]: 85 [0], given: 11

If a trader, by means of false measures, gains 20% while buy [#permalink] New post 03 Nov 2011, 08:57
00:00
A
B
C
D
E

Difficulty:

(N/A)

Question Stats:

0% (00:00) correct 0% (00:00) wrong based on 0 sessions
If a trader, by means of false measures, gains 20% while buying and again gains 25% while selling. What is his overall gain%

Answer:
[Reveal] Spoiler:
50%.
1 KUDOS received
Director
Director
User avatar
Status:
Joined: 24 Jul 2011
Posts: 557
GMAT 1: 780 Q51 V48
GRE 1: 1540 Q800 V740
Followers: 64

Kudos [?]: 288 [1] , given: 11

Re: Profit and loss [#permalink] New post 03 Nov 2011, 10:09
1
This post received
KUDOS
The answer is 50%.

Assume that the cost price of the item is x. Then the trader pays x(1-20/100) = 0.8x for it. Therefore gain made in buying the item = x - 0.8x = 0.2x
Next, he sells it for a 25% gain. So he sells it at 0.8x(1+25/100) = x. Gain made while selling = x - 0.8x = 0.2x

Total gain = 0.2x + 0.2x = 0.4x
Cost price = 0.8x
Therefore % gain = 0.4x/0.8x = 50%
_________________

GyanOne | http://www.GyanOne.com | +91 9899831738

Get a free detailed MBA profile evaluation

Top MBA Rankings and MBA Admissions blog


Image

1 KUDOS received
Manager
Manager
avatar
Joined: 29 Oct 2011
Posts: 188
Concentration: General Management, Technology
Schools: Sloan '16 (D)
GMAT 1: 760 Q49 V44
GPA: 3.76
Followers: 7

Kudos [?]: 73 [1] , given: 19

Re: Profit and loss [#permalink] New post 03 Nov 2011, 10:40
1
This post received
KUDOS
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%.
Current Student
User avatar
Joined: 25 Aug 2011
Posts: 195
Location: India
GMAT 1: 730 Q49 V40
WE: Operations (Insurance)
Followers: 1

Kudos [?]: 85 [0], given: 11

Re: Profit and loss [#permalink] New post 03 Nov 2011, 11:25
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
Expert Post
Veritas Prep GMAT Instructor
User avatar
Joined: 16 Oct 2010
Posts: 4877
Location: Pune, India
Followers: 1153

Kudos [?]: 5364 [0], given: 165

Re: Profit and loss [#permalink] New post 03 Nov 2011, 22:41
Expert's post
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

Save $100 on Veritas Prep GMAT Courses And Admissions Consulting
Enroll now. Pay later. Take advantage of Veritas Prep's flexible payment plan options.

Veritas Prep Reviews

Current Student
User avatar
Joined: 25 Aug 2011
Posts: 195
Location: India
GMAT 1: 730 Q49 V40
WE: Operations (Insurance)
Followers: 1

Kudos [?]: 85 [0], given: 11

Re: Profit and loss [#permalink] New post 04 Nov 2011, 04:51
VeritasPrepKarishma wrote:
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/



That was really helpful Karishma, Thanks s ton for this
Manager
Manager
User avatar
Status: livin on a prayer!!
Joined: 12 May 2011
Posts: 125
Location: Australia
Followers: 0

Kudos [?]: 17 [0], given: 1

Re: Profit and loss [#permalink] New post 04 Nov 2011, 18:37
You can also put in a SMART number. Let the number be 100.

20% of 100 = 20, so price is 120.
25% of 120 is 30, so price is 150

Therefore there is a change of 50 units from 100 = 50%
_________________

Aim for the sky! (800 in this case)
If you like my post, please give me Kudos :)

Senior Manager
Senior Manager
User avatar
Status: mba here i come!
Joined: 07 Aug 2011
Posts: 271
Location: Pakistan
Concentration: Strategy, Marketing
Schools: Insead '13 (M)
GMAT 1: 680 Q46 V37
GMAT 2: Q V
Followers: 24

Kudos [?]: 722 [0], given: 48

GMAT ToolKit User
Re: Profit and loss [#permalink] New post 08 Nov 2011, 02:46
1.2*1.25 = 1.5
so 50%
_________________

press +1 Kudos to appreciate posts
Download Valuable Collection of Percentage Questions (PS/DS)

Re: Profit and loss   [#permalink] 08 Nov 2011, 02:46
    Similar topics Author Replies Last post
Similar
Topics:
3 Experts publish their posts in the topic Listed below are the mean temperatures measured in the Tokha bagdbmba 5 11 Jul 2013, 03:23
9 Experts publish their posts in the topic A man cheats while buying as well as while selling. While VeritasPrepKarishma 7 01 Jul 2012, 21:02
Experts publish their posts in the topic A man sold 20 articles for $60 and gained 20%. How many rxs0005 6 28 Jul 2010, 08:20
Measuring the brain waves of human beings while they are beckee529 1 03 Aug 2007, 20:32
This sentence while conveying the meaning is not El Torro 5 01 Feb 2006, 13:04
Display posts from previous: Sort by

If a trader, by means of false measures, gains 20% while buy

  Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Privacy Policy| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group and phpBB SEO

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.