GMAT Question of the Day - Daily to your Mailbox; hard ones only

 It is currently 14 Nov 2018, 06:05

### 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

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

## Events & Promotions

###### Events & Promotions in November
PrevNext
SuMoTuWeThFrSa
28293031123
45678910
11121314151617
18192021222324
2526272829301
Open Detailed Calendar
• ### $450 Tuition Credit & Official CAT Packs FREE November 15, 2018 November 15, 2018 10:00 PM MST 11:00 PM MST EMPOWERgmat is giving away the complete Official GMAT Exam Pack collection worth$100 with the 3 Month Pack ($299) • ### Free GMAT Strategy Webinar November 17, 2018 November 17, 2018 07:00 AM PST 09:00 AM PST Nov. 17, 7 AM PST. Aiming to score 760+? Attend this FREE session to learn how to Define your GMAT Strategy, Create your Study Plan and Master the Core Skills to excel on the GMAT. # A pharmaceutical company received$3 million in royalties

 new topic post reply Question banks Downloads My Bookmarks Reviews Important topics
Author Message
TAGS:

### Hide Tags

Manager
Joined: 02 Dec 2012
Posts: 177

### Show Tags

12 Dec 2012, 04:32
5
13
A pharmaceutical company received $3 million in royalties on the first$20 million in sales of the generic equivalent of one of its products and then $9 million in royalties on the next$108 million in sales. By approximately what percent did the ratio of royalties to sales decrease from the first $20 million in sales to the next$108 million in sales?

(A) 8%
(B) 15%
(C) 45%
(D) 52%
(E) 56%

General formula for percent increase or decrease, (percent change) is $$Percent=\frac{Change}{Original}*100$$.

Thus, the royalties decreased by approximately:

$$=\frac{\frac{3}{20} - \frac{9}{108}}{\frac{3}{20}}*100 \approx {44\%}$$.

P.S. How to calculate:

$$\frac{\frac{3}{20}-\frac{1}{12}}{\frac{3}{20}}*100=\frac{\frac{9}{60}-\frac{5}{60}}{\frac{3}{20}}*100=\frac{\frac{4}{60}}{\frac{3}{20}}*100=\frac{4}{60}*\frac{20}{3}*100=\frac{4}{9}*100\approx{0.44*100}=44$$
_________________
Retired Moderator
Joined: 23 Sep 2015
Posts: 382
Location: France
GMAT 1: 690 Q47 V38
GMAT 2: 700 Q48 V38
WE: Real Estate (Mutual Funds and Brokerage)

### Show Tags

14 Dec 2012, 02:18
3
Ans:

for this kind of percentage change questions we apply the formula (change/original)x100, so here we have initial ratio=3/20 final ratio=1/12 . now change = 3/20-1/12=1/15 , putting these values in the formula we get the answer as (C).
_________________

www.mnemoniceducation.com

TURN ON YOUR MINDS!!!

Manager
Joined: 07 Apr 2014
Posts: 115

### Show Tags

29 May 2015, 14:53
4
Hi katzzzz,

Percent questions come from the broader family of 'ratio-based' questions and you're going to see a bunch of those on Test Day, so you have to make sure that you're ready for them. While some of these questions can be wordier/longer than average, the 'key' to answering these types of questions quicker is to organize information in the most effective way possible (for the question that is asked and for the answer choices that are given).

For example, ALL of the following examples mean the same thing, so you have to decide which would be easiest to work with...

Men/Women = 1 to 10 = 1:10 = 1/10 = 0.1 = 10%
10M = 1W

GMAT assassins aren't born, they're made,
Rich
_________________

760+: Learn What GMAT Assassins Do to Score at the Highest Levels
Contact Rich at: Rich.C@empowergmat.com

# Rich Cohen

Co-Founder & GMAT Assassin

Special Offer: Save $75 + GMAT Club Tests Free Official GMAT Exam Packs + 70 Pt. Improvement Guarantee www.empowergmat.com/ *****Select EMPOWERgmat Courses now include ALL 6 Official GMAC CATs!***** e-GMAT Representative Joined: 04 Jan 2015 Posts: 2191 A pharmaceutical company received$3 million in royalties  [#permalink]

### Show Tags

02 Jun 2015, 04:48
katzzzz wrote:
For me, percentage questions seem time consuming ..not sure if I am the only one feel this way..

Dear katzzzz

One reason why percentage questions may seem time consuming to you is that they usually have multiple data points (for example, the current question has earlier royalty, earlier sales, new royalty, new sales, the percentage change between earlier ratio of royalty:sales to new royalty:sales. That may seem quite a handful of quantities to track and tackle! )

Here's an approach that I suggest to you for questions that seem to have lots of information: Always go from the unknown to the known.

By Unknown, I mean what the question is asking.
By known, I mean the given information.

Let me illustrate this approach here.

The question is asking about the % decrease in some ratio.

So, my first step is to let this % decrease be P.

So, I can write:

$$Later Ratio = (1 - \frac{P}{100})(Earlier Ratio)$$

Now, what is the Ratio being considered here? It is the ratio of 'Royalty to Sales'

So, the above equation becomes:

$$\frac{(Later Royalty)}{(Later Sales)} = (1 - \frac{P}{100})\frac{(Earlier Royalty)}{(Earlier Sales)}$$

Now the question is easy to solve. You simply substitute the values of earlier and later royalty, and earlier and later sales, and you get the value of P.

As you can see, this approach of going 'From Unknown to Known' gave us a sense of direction to wade through the given information.

I hope this helped.

Best Regards

Japinder
_________________

Number Properties | Algebra |Quant Workshop

Success Stories
Guillermo's Success Story | Carrie's Success Story

Ace GMAT quant
Articles and Question to reach Q51 | Question of the week

Number Properties – Even Odd | LCM GCD | Statistics-1 | Statistics-2
Word Problems – Percentage 1 | Percentage 2 | Time and Work 1 | Time and Work 2 | Time, Speed and Distance 1 | Time, Speed and Distance 2
Advanced Topics- Permutation and Combination 1 | Permutation and Combination 2 | Permutation and Combination 3 | Probability
Geometry- Triangles 1 | Triangles 2 | Triangles 3 | Common Mistakes in Geometry
Algebra- Wavy line | Inequalities

Practice Questions
Number Properties 1 | Number Properties 2 | Algebra 1 | Geometry | Prime Numbers | Absolute value equations | Sets

| '4 out of Top 5' Instructors on gmatclub | 70 point improvement guarantee | www.e-gmat.com

Manager
Joined: 30 Dec 2015
Posts: 84
GPA: 3.92
WE: Engineering (Aerospace and Defense)

### Show Tags

10 Apr 2016, 09:43
4
A pharmaceutical company received $3 million in royalties on the first$20 million in sales of the generic equivalent of one of its products and then $9 million in royalties on the next$108 million in sales. By approximately what percent did the ratio of royalties to sales decrease from the first $20 million in sales to the next$108 million in sales?

(A) 8%
(B) 15%
(C) 45%
(D) 52%
(E) 56%

First $20 million: royalties/sales ratio = 3/20 = 36/240 Next$108 million: royalties/sales ratio = 9/108 = 1/12 = 20/240

Noticed that I rewrote both with the SAME DENOMINATOR.
So, now all we need to is determine the percent change from 36 to 20.
To do so, we could use some more lengthy calculations [e.g., 100(36-20)/36]
HOWEVER, notice that, if we start at 36, a 50% decrease would give us 18.
So going from 36 to 20, must be a decrease that's LESS THAN 50% (but also pretty close to 50%)
Only one answer choice works.

Related Resource
The following free video covers the concepts/strategies that are useful for answering this question:

Cheers,
Brent
_________________

Brent Hanneson – GMATPrepNow.com

Target Test Prep Representative
Status: Founder & CEO
Affiliations: Target Test Prep
Joined: 14 Oct 2015
Posts: 4171
Location: United States (CA)

### Show Tags

25 Mar 2017, 09:01
let's write this translation problem from the beginning into formula:
3/20-9/108 or 3/20-1/12 or 9/60-5/60=4/60

(4/60)/(9/60)=4/9 hence cca 44%
Manager
Joined: 12 Jun 2016
Posts: 216
Location: India
WE: Sales (Telecommunications)

### Show Tags

13 Jan 2018, 22:54
Bunuel chetan2u amanvermagmat niks18

Quote:

$$=\frac{\frac{3}{20}-\frac{9}{108}}{\frac{3}{20}}*100\approx{44%}$$.

Is below approach the most efficient for simplification:
Taking 1/4 common after simplifying(3/20 - 1/12)
in numerator which finally simplifies to 2/3 and then multiplying by 20/3
which approx to 40/9. Now since denominator is slightly less than 10
and 40/10 is 4 so we shall get fraction as slightly more than 4.xx as a value.
_________________

It's the journey that brings us happiness not the destination.

Math Expert
Joined: 02 Sep 2009
Posts: 50580

### Show Tags

14 Jan 2018, 05:00
Bunuel chetan2u amanvermagmat niks18

Quote:

$$=\frac{\frac{3}{20}-\frac{9}{108}}{\frac{3}{20}}*100\approx{44%}$$.

Is below approach the most efficient for simplification:
Taking 1/4 common after simplifying(3/20 - 1/12)
in numerator which finally simplifies to 2/3 and then multiplying by 20/3
which approx to 40/9. Now since denominator is slightly less than 10
and 40/10 is 4 so we shall get fraction as slightly more than 4.xx as a value.

since the choices are slightly away, even approximation would do...

get the denominator close by to compare the numerator..
$$\frac{3}{20}=\frac{3*5.5}{20*5.5}=\frac{16.5}{110}~\frac{16.5}{108}$$
compare 16.5/108 with 9/108
so Now we are looking at 16.5 coming down to 9.... $$\frac{16.5-9}{16.5}=7.5/16.5$$
half of 16.5 is 8.xx so 7.5 should be closer to 50% but <50%
ans 44%

Ofcourse the method above by Bunuel is simple and accurate BUT a lot depends on your ease with a method..
_________________

1) Absolute modulus : http://gmatclub.com/forum/absolute-modulus-a-better-understanding-210849.html#p1622372
2)Combination of similar and dissimilar things : http://gmatclub.com/forum/topic215915.html
3) effects of arithmetic operations : https://gmatclub.com/forum/effects-of-arithmetic-operations-on-fractions-269413.html

GMAT online Tutor

VP
Joined: 09 Mar 2016
Posts: 1062

### Show Tags

06 May 2018, 09:02
1
dave13 wrote:
A pharmaceutical company received $3 million in royalties on the first$20 million in sales of the generic equivalent of one of its products and then $9 million in royalties on the next$108 million in sales. By approximately what percent did the ratio of royalties to sales decrease from the first $20 million in sales to the next$108 million in sales?

(A) 8%
(B) 15%
(C) 45%
(D) 52%
(E) 56%

here is my approach, not sure though if it is correct though, niks18 can you please confirm it

$$20=100%$$
$$3=x$$

cross multiply $$x = 15$$

$$108=100%$$
$$9 = x$$
cross multiply $$x = 8$$

now to calculate the difference in % decrease

$$\frac{15-8}{15}$$ = $$\frac{7}{15}$$ approx i get 0.47 % which is closer to option C

Hi dave13

Sorry but your method is incorrect. if you have assigned a value to the variable, then it should remain same. What is x here? and if you say x=3, then x cannot take any other value. Can you explain the reason to cross-multiply?

Refer to Bunuel 's solution above for correct approach.

Note the question is asking decrease in "Ratio". So try to find out the two ratios and then simply calculate the % decrease.
Senior Manager
Joined: 31 May 2017
Posts: 321

### Show Tags

22 May 2018, 10:23

Yes - your approach/calculations are perfect for this question!

GMAT assassins aren't born, they're made,
Rich
_________________

760+: Learn What GMAT Assassins Do to Score at the Highest Levels
Contact Rich at: Rich.C@empowergmat.com

# Rich Cohen

Co-Founder & GMAT Assassin

Special Offer: Save $75 + GMAT Club Tests Free Official GMAT Exam Packs + 70 Pt. Improvement Guarantee www.empowergmat.com/ *****Select EMPOWERgmat Courses now include ALL 6 Official GMAC CATs!***** Intern Joined: 22 Sep 2018 Posts: 3 Re: A pharmaceutical company received$3 million in royalties  [#permalink]

### Show Tags

01 Nov 2018, 21:27
$$=\frac{\frac{3}{20}-\frac{9}{108}}{\frac{3}{20}}*100\approx{44%}$$.[/quote]

Is below approach the most efficient for simplification:
Taking 1/4 common after simplifying(3/20 - 1/12)
in numerator which finally simplifies to 2/3 and then multiplying by 20/3
which approx to 40/9. Now since denominator is slightly less than 10
and 40/10 is 4 so we shall get fraction as slightly more than 4.xx as a value.[/quote]

I'd suggest another way:

$$\frac{\frac{3}{20}-\frac{9}{108}}{\frac{3}{20}}=(\frac{3}{20}-\frac{1}{12})*\frac{20}{3}=1 -\frac{1}{12}*\frac{20}{3}=1-\frac{5}{9}=\frac{4}{9}=0.444....$$[/quote]

Isn't the formula (new-old)/old. why are you writing it (old-new)/old?
Re: A pharmaceutical company received $3 million in royalties &nbs [#permalink] 01 Nov 2018, 21:27 Go to page 1 2 Next [ 21 posts ] Display posts from previous: Sort by # A pharmaceutical company received$3 million in royalties

 new topic post reply Question banks Downloads My Bookmarks Reviews Important topics

 Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne 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®.