Responding to a pm:

The output of a factory was increased by 10% to keep up with rising demand. To handle the holiday rush, this new output was increased by 20%. By approximately what percent would the output now have to be decreased in order to restore the original output?

20%

24%

30%

32%

79%

The original output increases by 10% and then 20%.

Method 1:

Holiday output = Old output * (11/10) *(6/5) = Old output * (33/25)

Now if you want to go back to the old output, you need to multiply the Holiday output by (25/33) i.e. reduce it by 8/33 which is approximately 24% (note that 8/33 = 24/99 i.e. approx 24%)

Holiday output * (25/33) = Old output * (33/25) * (25/33) = Old output

Method 2:

Or, use the formula.

Total % change = a + b + ab/100

Total % change = 10 + 20 + 10*20/100 = 32%

Now, you want to change it to 0, so,

0 = 32 + x + 32x/100

x = -32(100)/132 = 24% approximately

_________________

Karishma

Veritas Prep GMAT Instructor

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