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# A broker invested her own money in the stock market. During the first

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Math Expert
Joined: 02 Sep 2009
Posts: 55668
A broker invested her own money in the stock market. During the first  [#permalink]

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24 Nov 2014, 07:25
1
00:00

Difficulty:

5% (low)

Question Stats:

90% (01:06) correct 10% (01:09) wrong based on 78 sessions

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Tough and Tricky questions: Percents.

A broker invested her own money in the stock market. During the first year, she increased her stock market wealth by 50 percent. In the second year, largely as a result of a slump in the stock market, she suffered a 30 percent decrease in the value of her stock investments. What was the net increase or decrease on her overall stock investment wealth by the end of the second year?

A) −5%
B) 5%
C) 15%
D) 20%
E) 80%

Kudos for a correct solution.

Source: Chili Hot GMAT

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Re: A broker invested her own money in the stock market. During the first  [#permalink]

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24 Nov 2014, 07:35
1
Assume the broker invested $100. After year 1 (50% increase in wealth):$100 * 0.5 = $50 increase +$100 = $150 After year 2 (30% decrease in wealth):$150 * 0.3 = $45;$150 - $45 decrease =$105

Net increase = $105/$100 - 1 = 5%

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Joined: 25 Jun 2014
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Re: A broker invested her own money in the stock market. During the first  [#permalink]

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24 Nov 2014, 09:50
1
Pick smart no 100 as initial investment
1st year: 150
Second year: 105
=> 5% increase.
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Posts: 426
Re: A broker invested her own money in the stock market. During the first  [#permalink]

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24 Nov 2014, 13:05
1
We can solve this question quickly using successive percent method.

You can answer this question very quickly by lumping the percents into one calculation.A 50% increase
followed by a 30% decrease is the same as 150% of 70% of the original number:

Let us say initial amount of money was $$x$$

At the end of 2nd year he wil have, $$\frac{150}{100}*\frac{70}{100}*x$$ = $$\frac{105}{100}*x$$, which is equivalent t 5% increment to original amount.

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Re: A broker invested her own money in the stock market. During the first  [#permalink]

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24 Nov 2014, 20:16
1

The OA is given in percentage, so best to assume initial investment = 100

After 1 year, value = 100+50 = 150

Next year, decrease by 30%$$= 150 - \frac{150*30}{100} = 105$$

Net increase = 5%
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Re: A broker invested her own money in the stock market. During the first  [#permalink]

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25 Nov 2014, 05:23
1
Let Money invested be 100

In first year it got increased by 50%
so the amount is now 150

In the second year the amount decreased by 30%
so the amount now =150-150*30/100=105

Since the initial amount is 100 & final amount 105
It shows a increase of 5% in the final amount.

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Posts: 55668
Re: A broker invested her own money in the stock market. During the first  [#permalink]

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25 Nov 2014, 07:55
Bunuel wrote:

Tough and Tricky questions: Percents.

A broker invested her own money in the stock market. During the first year, she increased her stock market wealth by 50 percent. In the second year, largely as a result of a slump in the stock market, she suffered a 30 percent decrease in the value of her stock investments. What was the net increase or decrease on her overall stock investment wealth by the end of the second year?

A) −5%
B) 5%
C) 15%
D) 20%
E) 80%

Kudos for a correct solution.

Source: Chili Hot GMAT

Official Solution:

A broker invested her own money in the stock market. During the first year, she increased her stock market wealth by 50 percent. In the second year, largely as a result of a slump in the stock market, she suffered a 30 percent decrease in the value of her stock investments. What was the net increase or decrease on her overall stock investment wealth by the end of the second year?

A) −5%
B) 5%
C) 15%
D) 20%
E) 80%

Elimination and Guessing

If you must guess, the key strategies of elimination include: (1) eliminate an answer that looks different from the others (2) eliminate answers which look too big or too small, i.e., extreme answers, and (3) eliminate answers which contain the same or similar numbers as given in the question or are easy derivatives of the numbers used in the problem. By easy derivatives, think in terms of addition and subtraction, not multiplication and division. For example, eliminate −5% because it is negative, and thus different from the other positive numbers. Eliminate 80% because it is much bigger than any other number (extreme). Eliminate 20% because it is an easy derivative of the numbers mentioned in the question, (i.e., 50% less 30%). You would then guess choices B or C. The actual answer is obtained by multiplying 150% by 70% and subtracting 100% from this total. That is: 150% × 70% = 105%; 105% − 100% = 5%.

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A broker invested her own money in the stock market. During the first  [#permalink]

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Updated on: 03 May 2015, 20:41
1.5x*0.7=1.05x

it is 5% increase

B

Originally posted by Temurkhon on 03 May 2015, 06:49.
Last edited by Temurkhon on 03 May 2015, 20:41, edited 1 time in total.
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Re: A broker invested her own money in the stock market. During the first  [#permalink]

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03 May 2015, 07:35
The broker gained 150% in the first year (1.5) and lost 30 percent in the second year (0.7 left).

1.5*0.7=(15*7)/100=1.05 which is a 5% increase, and B should be correct.
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Re: A broker invested her own money in the stock market. During the first  [#permalink]

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17 Sep 2018, 00:23
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Re: A broker invested her own money in the stock market. During the first   [#permalink] 17 Sep 2018, 00:23
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