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# Increasing the original price of a certain item by 25 percent and then

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Math Expert
Joined: 02 Sep 2009
Posts: 58311
Increasing the original price of a certain item by 25 percent and then  [#permalink]

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23 Mar 2015, 06:43
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15% (low)

Question Stats:

80% (01:28) correct 20% (01:23) wrong based on 220 sessions

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Increasing the original price of a certain item by 25 percent and then increasing the new price by 25 percent is equivalent to increasing the original price by what percent?

A. 31.25
B. 37.50
C. 50.00
D. 52.50
E. 56.25

Kudos for a correct solution.

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Increasing the original price of a certain item by 25 percent and then  [#permalink]

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Updated on: 23 Mar 2015, 08:08
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Price * 1.25 * 1.25 = Price $$* \frac{5}{4}*\frac{5}{4}$$ = Price * $$\frac{25}{16}$$ = Price *(1 $$+ \frac{9}{16}$$)

$$\frac{9}{16}$$ is 1 sixteenth more than one half; one eighth is .125, so one sixteenth is .0625, so total increase is 56.25%.

Originally posted by eaze on 23 Mar 2015, 07:36.
Last edited by eaze on 23 Mar 2015, 08:08, edited 1 time in total.
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Re: Increasing the original price of a certain item by 25 percent and then  [#permalink]

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23 Mar 2015, 07:47
speedilly wrote:
Price * 1.25 * 1.25 = Price $$* \frac{5}{4}*\frac{5}{4}$$ = Price * $$\frac{25}{16}$$ = Price *(1 $$+ \frac{9}{16}$$)

$$\frac{9}{16}$$ is 1 sixteenth more than one half; one eighth is .125, so one sixteenth is .0625, so total increase is 56.25%.

i hope you meant to say Answer E.
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Joined: 07 Aug 2011
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Re: Increasing the original price of a certain item by 25 percent and then  [#permalink]

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23 Mar 2015, 07:48
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Bunuel wrote:
Increasing the original price of a certain item by 25 percent and then increasing the new price by 25 percent is equivalent to increasing the original price by what percent?

A. 31.25
B. 37.50
C. 50.00
D. 52.50
E. 56.25

Kudos for a correct solution.

X*1.25*1.25 = 1.5625 X
so there is a net increase of 56.25% . Answer E.
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Re: Increasing the original price of a certain item by 25 percent and then  [#permalink]

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23 Mar 2015, 08:09
Lucky2783 wrote:
speedilly wrote:
Price * 1.25 * 1.25 = Price $$* \frac{5}{4}*\frac{5}{4}$$ = Price * $$\frac{25}{16}$$ = Price *(1 $$+ \frac{9}{16}$$)

$$\frac{9}{16}$$ is 1 sixteenth more than one half; one eighth is .125, so one sixteenth is .0625, so total increase is 56.25%.

i hope you meant to say Answer E.

I did! Whoops. Thanks for the correction!
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Re: Increasing the original price of a certain item by 25 percent and then  [#permalink]

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24 Mar 2015, 23:00
2
Hi All,

The math behind this prompt can be done in a number of different ways (using fractions, decimals or ratios). The prompt is perfect for TESTing VALUES.

We're told that the original price of an item is increased by 25% and then THAT price is increased by 25%....

IF....
Starting value = $100 + 25% = 100 + .25(100) = 125 + 25% = 125 + .25(125) = 125 + 31.25 = 156.25 The question asks how the final price relates to the original price. This is essentially about Percentage Change, which means we should use the Percentage Change Formula: Percentage Change = (New - Old)/Old = Difference/Original Doing either calculation will yield the same result: 56.25/100 = 56.25% Final Answer: GMAT assassins aren't born, they're made, Rich _________________ Contact Rich at: Rich.C@empowergmat.com The Course Used By GMAT Club Moderators To Earn 750+ souvik101990 Score: 760 Q50 V42 ★★★★★ ENGRTOMBA2018 Score: 750 Q49 V44 ★★★★★ Manager Joined: 06 Jan 2014 Posts: 52 Re: Increasing the original price of a certain item by 25 percent and then [#permalink] ### Show Tags 25 Mar 2015, 00:50 1 Let Orignal Cost be 100 First Increase = 100 *1.25 = 125 Second Increase = 125 * 1.25 = 156.25 Total Increase = 56.25 Ans : E _________________ ______________________________ Liked the Post !!!! KUDOs Plzzzzz SVP Status: The Best Or Nothing Joined: 27 Dec 2012 Posts: 1751 Location: India Concentration: General Management, Technology WE: Information Technology (Computer Software) Re: Increasing the original price of a certain item by 25 percent and then [#permalink] ### Show Tags 25 Mar 2015, 01:51 3 Answer = E. 56.25 For initial price of 100, twice the hike of 25% means $$(100+25) * \frac{125}{100} = 156.25$$ Hike = 156.25 - 100 = 56.25 _________________ Kindly press "+1 Kudos" to appreciate Math Expert Joined: 02 Sep 2009 Posts: 58311 Re: Increasing the original price of a certain item by 25 percent and then [#permalink] ### Show Tags 30 Mar 2015, 03:17 Bunuel wrote: Increasing the original price of a certain item by 25 percent and then increasing the new price by 25 percent is equivalent to increasing the original price by what percent? A. 31.25 B. 37.50 C. 50.00 D. 52.50 E. 56.25 Kudos for a correct solution. MAGOOSH OFFICIAL SOLUTION: Attachment: increasefollowedbyincrease_text.PNG [ 19.7 KiB | Viewed 5242 times ] _________________ SVP Joined: 06 Nov 2014 Posts: 1873 Re: Increasing the original price of a certain item by 25 percent and then [#permalink] ### Show Tags 31 Mar 2015, 12:40 Bunuel wrote: Increasing the original price of a certain item by 25 percent and then increasing the new price by 25 percent is equivalent to increasing the original price by what percent? A. 31.25 B. 37.50 C. 50.00 D. 52.50 E. 56.25 Kudos for a correct solution. Let original price = 100. Increase by 25% = 125 Increase by 25% again = 125 * 1.25 = 156.25 This is 56.25 more than original price. -- Optimus Prep's GMAT On Demand course for only$299 covers all verbal and quant. concepts in detail. Visit the following link to get your 7 days free trial account: http://www.optimus-prep.com/gmat-on-demand-course
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Re: Increasing the original price of a certain item by 25 percent and then  [#permalink]

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01 Apr 2015, 02:46
Picked an easy number.

100*1,25 = 125
125*1,25 = 156,25
156,25 - 100 = 56,25
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Joined: 17 Feb 2016
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Re: Increasing the original price of a certain item by 25 percent and then  [#permalink]

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21 Dec 2016, 22:38
Hi,

Could someone please tell me if we can use the Net change formula a+b+(ab/100)

Thanks!!
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Re: Increasing the original price of a certain item by 25 percent and then  [#permalink]

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22 Dec 2016, 14:03
Original = 100
New1 = 100 ( 1.25 ) = 125
New2 = 125(1.25) = 156.25
$$\frac{Change}{Original} = \frac{Percent}{100}$$
E
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Re: Increasing the original price of a certain item by 25 percent and then  [#permalink]

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04 Mar 2018, 04:36
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Re: Increasing the original price of a certain item by 25 percent and then   [#permalink] 04 Mar 2018, 04:36
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