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During a 7-year period the profits of Midas, Inc. changed by

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Manager
Joined: 27 Jul 2003
Posts: 122
Location: Singapore
During a 7-year period the profits of Midas, Inc. changed by [#permalink]

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15 Oct 2003, 01:42
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During a 7-year period the profits of Midas, Inc. changed by what percent from the sixth year to the seventh year?
(1) The profits of Midas, Inc. during the seventh year were 50 percent greater than the profits during the third year.
(2) The increase in the profits of Midas, Inc. was the same for each year during the 7-year period.
SVP
Joined: 03 Feb 2003
Posts: 1604

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15 Oct 2003, 02:09
we need to find (P7-P6)/P6

(1) P7=1.5P3 NOT SUFF
(2) profits comprise an ariphmetic progression, yet we do not know a constant increase.

Combine: SUFF

I vote for C.
CEO
Joined: 15 Aug 2003
Posts: 3454

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15 Oct 2003, 02:19
stolyar wrote:
we need to find (P7-P6)/P6

(1) P7=1.5P3 NOT SUFF
(2) profits comprise an ariphmetic progression, yet we do not know a constant increase.

Combine: SUFF

I vote for C.

when we combine, we know that

P7 = 1.5 P3

And the increase is constant.

P7 = 1.125 P6

Is this how you did it?
Manager
Joined: 27 Jul 2003
Posts: 122
Location: Singapore

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15 Oct 2003, 02:32
Praetorian,
This ques is from 800 score test
Here is their explanation

(C) Here you want to find the percent increase in profits from the sixth year to the seventh year. To find this you would need to know the profits in each of these years or some sort of ratio relating the profits in these years.

Statement 1: This statement taken by itself is insufficient because it doesn't relate the sixth and seventh years in any way.

Statement 2: This statement taken by itself is also insufficient, because even though the increase in profits was the same each year, that same increase can have different values. That is, the increase could have been $1,000,000 each year or$10,000,000, or anything else. You also have no information about what the profits were in the sixth year, so Statement (2) will not enable you to answer the question.

Statements 1 & 2: Call the profits in the third year P. Then Statement (1) tells you that the profits in the seventh year were 50% greater than the third year , or Statement (2) then tells you that the profits increased the same amount from one year to the next. HERE COMES THE TRICK: to actually solve this question you have to take the 3rd year's profit, multiply it by a factor of the set increase (according to Statement 2 profits increase by the same amount each year) and compound this through year 4, 5, 6, and 7 to get the 50% increase. Essentially, it is '(100%+x) to the fourth power = 150%, solve for x'. Since you COULD solve this question (even though you shouldn't waste you time on it during the tests), the answer is C. All Data Sufficiency questions want to know is 'Can you solve this question with the statements shown.' Sometimes you shouldn't waste your time actually doing the calculation.
15 Oct 2003, 02:32
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