hibobotamuss wrote:
Hi
vaibhav1221 ...can you explain what exactly you've done?
Why haven't we just taken the differences of 2/125 and 200/3 and divided that by 2/125? Isn't that how you see percent change?
Hi
hibobotamuss!
See we need to compare the profits from both the expenditures.
We cannot simply compare $400 and $1200 to find the whether the profit has increased or decreased because the base value or the expenditure in both the situations is different. In order to solve this question, we can either make the base expenditure same as Chetan2u did or take the percentage markup or profit of the expenditure like I did.
So what i did was, I assumed that on an expenditure of $25000 the store made $400 i.e x% profit of 25000 and this is calculated as follows:-
\(25000*\frac{x}{100} = 400\)
\(x = \frac{8}{5}\)
I did the same thing for the other scenario wherein the expenditure was $80000 and profit was $1200 and this is calculated as follows:-
\(80000*\frac{y}{100} = 1200\)
\(y = \frac{12}{8}\)
I calculated the percentage markup on both the expenditures so that it gets a common base (percentage of something) and only then we can compare the two quantities.
Percentage change is measure as
% change \(=\) \(\frac{New - Initial}{Initial}*100\)
This is the formula to measure % change. Here the new value \(\frac{12}{8}\) and the initial value would be \(\frac{8}{5}\) because we need to find the percentage change from when the profit was $400 on an expenditure of $25000 to when the profit was $1200 on an expenditure of $80000.
I did the calculations as follows:-
\(\frac{\frac{12}{8} - \frac{8}{5}}{\frac{8}{5}}*100\)
=\(\frac{-1}{16}*100\)
= \(-6.25%\)
A negative answer implies a decrease.
So the answer is B.
Hope this helps.
Regards,
Vaibhav
_________________
Vaibhav
Sky is the limit. 800 is the limit.
~GMAC