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If a store owner increases a product’s price by 20 percent and then in

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Math Expert
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Joined: 02 Sep 2009
Posts: 59561
If a store owner increases a product’s price by 20 percent and then in  [#permalink]

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New post 13 Dec 2015, 05:13
00:00
A
B
C
D
E

Difficulty:

  5% (low)

Question Stats:

96% (00:57) correct 4% (03:33) wrong based on 68 sessions

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If a store owner increases a product’s price by 20 percent and then increases this price by another 15 percent, what percent of the original price is the total price increase?

A. 20%
B. 35%
C. 38%
D. 65%
E. 135%
Director
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Joined: 20 Feb 2015
Posts: 737
Concentration: Strategy, General Management
Re: If a store owner increases a product’s price by 20 percent and then in  [#permalink]

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New post 13 Dec 2015, 12:21
let the initial price be 100
1st increase =20 % the price now is 120
2nd increase of 15% on 120 =18
final price =138, total increase =38%
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Re: If a store owner increases a product’s price by 20 percent and then in  [#permalink]

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New post 14 Dec 2015, 18:05
Hi All,

This question can be solved in a few different ways: TESTing VALUES (the approach used by CounterSniper), working algebraically or by taking some notes and using some logic (and the answer choices) to our advantage:

We're told that a product's price is increased by 20% and then this NEW PRICE is increased by 15%. We're asked for the overall percent increase from the two individual increases.

From a math standpoint, the final price of the product (X) after the two increases can be represented by...

X(1.2)(1.15)

1.2X = 120% of the price = 20% increase

Since the 15% increase is now increasing 1.2X (and not just X), then the resulting increase would have to be MORE than just .15X (so we'd have a total that was GREATER than 1.35X, but not by much). There's only one answer that fits that pattern...

Final Answer:

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Rich
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Re: If a store owner increases a product’s price by 20 percent and then in  [#permalink]

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New post 27 Feb 2018, 09:55
Let the price of product be x
after first increase by 20%, its 1.2x
next, its increase by 15%, therefore 1.15*1.2x = 1.38x => 38%

Answer: C
GMAT Club Bot
Re: If a store owner increases a product’s price by 20 percent and then in   [#permalink] 27 Feb 2018, 09:55
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