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10 Jul 2011, 09:03
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Difficulty:
25%
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Question Stats:
82% (01:18) correct
18%
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If a brokerage firm charged a commission of 2% of the total dollar amount of a certain trade, what was the total dollar amount of that trade?
Statement 1: The dollar amount of the trade minus the brokerage firm's commission was $88000
Statement 2: The brokerage firm's commission decreased the profit earned on the trade by 20%.
Statement 1: The dollar amount of the trade minus the brokerage firm's commission was $88000
Statement 2: The brokerage firm's commission decreased the profit earned on the trade by 20%.
Show SpoilerMy approach
Here is my approach to solve the question. I am stuck on Statement 2 which I have presented over here.
Solution:
Lets say d be the dollar amount of that trade and c be the brokerage firm's commission.
So c=0.02d
Considering statement 1 : d - c =88000
Substitute the value of c and we can find the value of d so its sufficient.
Considering Statement 2: This is where I get stuck:
Let say p be the firm's initial profit
Its decreased by 20% = p-0.20p=0.80p. After this I get lost........ Can someone please tell me if my approach is correct and how to move ahead with statement ?
Solution:
Lets say d be the dollar amount of that trade and c be the brokerage firm's commission.
So c=0.02d
Considering statement 1 : d - c =88000
Substitute the value of c and we can find the value of d so its sufficient.
Considering Statement 2: This is where I get stuck:
Let say p be the firm's initial profit
Its decreased by 20% = p-0.20p=0.80p. After this I get lost........ Can someone please tell me if my approach is correct and how to move ahead with statement ?
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10 Jul 2011, 11:05
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enigma123
Hi Enigma,
your approach is perfect ..
st1: you are right on money
St2: clearly insufficient.
profits decreased by 20% .. so its now 80%. It says commission decreased the proflt by 20%.
you just cant solve this to get total dollar value
Do let me know if you have any problem understanding this .
jamifahad
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10 Jul 2011, 11:10
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Statement 2: The brokerage firm's commission decreased the profit earned on the trade by 20%.
For statement 2: Profit = S.P - C.P
Now S.P=total dollar amount of trade=x
Let initial C.P be y
So initial profit p1=x-y
Commission earned = 2% of x = 0.02x
p2=0.02x-y
p1-p2/p1 * 100 = 20
x-y-0.02x+y/x-y * 100 = 20
0.08x/x-y =0.2
We do not know y (C.P). Hence insufficient.
For statement 2: Profit = S.P - C.P
Now S.P=total dollar amount of trade=x
Let initial C.P be y
So initial profit p1=x-y
Commission earned = 2% of x = 0.02x
p2=0.02x-y
p1-p2/p1 * 100 = 20
x-y-0.02x+y/x-y * 100 = 20
0.08x/x-y =0.2
We do not know y (C.P). Hence insufficient.
