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# If a brokerage firm charged a commission of 2% of the total

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If a brokerage firm charged a commission of 2% of the total [#permalink]

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10 Jul 2011, 09:03
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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%. [Reveal] Spoiler: My 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 ? [Reveal] Spoiler: OA _________________ Best Regards, E. MGMAT 1 --> 530 MGMAT 2--> 640 MGMAT 3 ---> 610 GMAT ==> 730 Current Student Joined: 26 May 2005 Posts: 565 Followers: 18 Kudos [?]: 209 [1] , given: 13 Re: Profit of the Brokerage Firm [#permalink] ### Show Tags 10 Jul 2011, 11:05 1 This post received KUDOS enigma123 wrote: 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%.

[Reveal] Spoiler: My 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 ?

Hi Enigma,

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 .
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Re: Profit of the Brokerage Firm [#permalink]

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10 Jul 2011, 11:10
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.
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Re: Profit of the Brokerage Firm [#permalink]

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10 Jul 2011, 11:39
enigma123 wrote:
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 $88000 Statement 2: The brokerage firm's commission decreased the profit earned on the trade by 20%. Let the total amount be$x

1.
x-0.02x=88000
0.98x=88000
x=88000/0.98
Sufficient.

2.
Let the profit be P.
0.2P=0.02x
P/x=0.02/0.2=1/10
10P=x

If P=10; x=100; commission=2;
If P=20; x=200; commission=4;

We can have many such combination, each giving us a different value for x.
Not Sufficient.

Ans: "A"
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Re: Profit of the Brokerage Firm [#permalink]

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13 Jul 2011, 06:03
enigma123 wrote:
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%. [Reveal] Spoiler: My 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 ? like it. A is the answer GMAT Club Legend Joined: 09 Sep 2013 Posts: 14478 Followers: 609 Kudos [?]: 174 [0], given: 0 Re: If a brokerage firm charged a commission of 2% of the total [#permalink] ### Show Tags 25 Oct 2015, 05:47 Hello from the GMAT Club BumpBot! Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos). Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email. _________________ Re: If a brokerage firm charged a commission of 2% of the total [#permalink] 25 Oct 2015, 05:47 Similar topics Replies Last post Similar Topics: 1 If a salesman received a commission of 3% of the sales 1 01 Mar 2017, 05:51 3 The total charge to rent a car for one day from Company J consists of 5 14 May 2016, 17:03 1 Is the total price of the items in Andrea's shopping cart less than$2 3 20 Dec 2015, 23:32
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