Last visit was: 25 Apr 2026, 19:07 It is currently 25 Apr 2026, 19:07
Home
Messages
Tests
Schools
Events
Close
GMAT Club Daily Prep
Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
Go to My Error Log Learn more
Close
Request Expert Reply
Confirm Cancel
Back to Forum
Create Topic
User avatar
gmatophobia
User avatar
Quant Chat Moderator
Joined: 22 Dec 2016
Last visit: 19 Apr 2026
Posts: 3,173
Own Kudos:
11,465
 [10]
Given Kudos: 1,862
Location: India
Concentration: Strategy, Leadership
Posts: 3,173
Kudos: 11,465
 [10]
In the year 2005, the revenue of Company ABC is $X. For a certain numb 14 May 2023, 23:09
3
Kudos
Add Kudos
7
Bookmarks
Bookmark this Post
00:00
Start Timer
Pause Timer
Resume Timer
Show Answer
Hide
Show
History
D
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!

Difficulty:

95% (hard)

Question Stats:

25% (02:23) correct 75% (02:25) wrong based on 88 sessions

History

Date
Time
Result
Not Attempted Yet
In the year 2005, the revenue of Company ABC is $\(X\). For a certain number of years, the revenue of the company increases by \(r\) percent per year. In the subsequent year, the revenue decreases by $\(Y\), and then it increases by \(r\) percent every year such that the final revenue of Company ABC is $\(Z\).

If \(X(1+\frac{r}{100})^5 = Z + Y(1+\frac{r}{100})^2\), how many years after 2005 the Company ABC will have a revenue of $\(Z\)?

A. 3

B. 4

C. 5

D. 6

E. 7

Show Spoiler
Don't overthink. The question can be solved under a minute using logic and reasoning :)
ShowHide Answer
Official Answer
D
Most Helpful Reply
User avatar
gmatophobia
User avatar
Quant Chat Moderator
Joined: 22 Dec 2016
Last visit: 19 Apr 2026
Posts: 3,173
Own Kudos:
11,465
 [7]
Given Kudos: 1,862
Location: India
Concentration: Strategy, Leadership
Posts: 3,173
Kudos: 11,465
 [7]
In the year 2005, the revenue of Company ABC is $X. For a certain numb 08 Aug 2023, 23:30
4
Kudos
Add Kudos
3
Bookmarks
Bookmark this Post
hellypatel


gmatophobia can you give a detailed explanation
Show more

See it's quite simple actually - the story is sort of a smoke screen. What matters is the equation.

X(some factor) = Z + Y*(some factor)

Now let's assume that the decrease didn't happen actually, and the resultant amount was Z. The formula to arrive at Z would be

X*(some factor) → \(X(1+\frac{r}{100})^n\)

n represents the number of years

Now because the decrease in one year occurred the decrease also gets compounded every year from subsequent the year it occurs till the year the value reaches Z.

X(some factor) - Y(some factor)

Y(some factor) represents the decrease.

Let's revisit the equation

So our final equation is

\(X(1+\frac{r}{100})^5 = Z + Y(1+\frac{r}{100})^2\)

\(X(1+\frac{r}{100})^5 - Y(1+\frac{r}{100})^2 = Z \)

The power associated with a multiplier of X is 5 → The total span is 5 years
The power associated with the multiplier of Y is 2 → Hence the decrease continued for two years after it started

So the sequence of the events are

Year 1 - Normal Compounding (i.e. Increase)
Year 2 - Normal Compounding (i.e. Increase)
Year 3 - Normal Compounding (i.e. Increase)
Year 4 - Decrease
Year 5 - Normal Compounding (i.e. Increase) + Decrease Compounding (i.e. Decrease, hence subtracted)
Year 6 - Normal Compounding (i.e. Increase) + Decrease Compounding (i.e. Decrease, hence subtracted)

Hope this makes sense!

Option D
General Discussion
User avatar
dthuy681
User avatar
Joined: 12 May 2022
Last visit: 11 Apr 2024
Posts: 5
Own Kudos:
2
 [1]
Given Kudos: 39
Posts: 5
Kudos: 2
 [1]
In the year 2005, the revenue of Company ABC is $X. For a certain numb 15 May 2023, 10:28
1
Kudos
Add Kudos
Bookmarks
Bookmark this Post
[X(1+r)^n1 - Y]*(1+r)^n2 = Z
--> X(1+r)^(n1+n2) - Y(1+r)^n2 = Z
--> n1+n2 = 5; n2=2
User avatar
aditinarayann
User avatar
Joined: 19 Apr 2023
Last visit: 26 Oct 2023
Posts: 1
Own Kudos:
1
 [1]
Given Kudos: 3
Location: India
Posts: 1
Kudos: 1
 [1]
In the year 2005, the revenue of Company ABC is $X. For a certain numb 08 Aug 2023, 11:20
1
Kudos
Add Kudos
Bookmarks
Bookmark this Post
How is the answer 6? Can you pls explain?
User avatar
Its_me_aka_ak
User avatar
Joined: 16 Jul 2023
Last visit: 10 Jun 2025
Posts: 111
Own Kudos:
21
 [1]
Given Kudos: 310
Location: India
Schools: ISB '25 Ivey Rotman '27 IIMA
GPA: 3.46
Schools: ISB '25 Ivey Rotman '27 IIMA
Posts: 111
Kudos: 21
 [1]
In the year 2005, the revenue of Company ABC is $X. For a certain numb 08 Aug 2023, 13:15
1
Kudos
Add Kudos
Bookmarks
Bookmark this Post
gmatophobia
In the year 2005, the revenue of Company ABC is $\(X\). For a certain number of years, the revenue of the company increases by \(r\) percent per year. In the subsequent year, the revenue decreases by $\(Y\), and then it increases by \(r\) percent every year such that the final revenue of Company ABC is $\(Z\).

If \(X(1+\frac{r}{100})^5 = Z + Y(1+\frac{r}{100})^2\), how many years after 2005 the Company ABC will have a revenue of $\(Z\)?

A. 3

B. 4

C. 5

D. 6

E. 7

Show Spoiler
Don't overthink. The question can be solved under a minute using logic and reasoning :)
Show more


please provide more simple and sorted explanation
User avatar
hellypatel
User avatar
Joined: 12 May 2023
Last visit: 15 Jun 2025
Posts: 5
Given Kudos: 20
Posts: 5
Kudos: 0
In the year 2005, the revenue of Company ABC is $X. For a certain numb 08 Aug 2023, 23:16
Kudos
Add Kudos
Bookmarks
Bookmark this Post
gmatophobia
In the year 2005, the revenue of Company ABC is $\(X\). For a certain number of years, the revenue of the company increases by \(r\) percent per year. In the subsequent year, the revenue decreases by $\(Y\), and then it increases by \(r\) percent every year such that the final revenue of Company ABC is $\(Z\).

If \(X(1+\frac{r}{100})^5 = Z + Y(1+\frac{r}{100})^2\), how many years after 2005 the Company ABC will have a revenue of $\(Z\)?

A. 3

B. 4

C. 5

D. 6

E. 7

Show Spoiler
Don't overthink. The question can be solved under a minute using logic and reasoning :)
Show more

gmatophobia can you give a detailed explanation
User avatar
bumpbot
User avatar
Non-Human User
Joined: 09 Sep 2013
Last visit: 04 Jan 2021
Posts: 38,986
Own Kudos:
1,118
Posts: 38,986
Kudos: 1,118
In the year 2005, the revenue of Company ABC is $X. For a certain numb 19 Sep 2024, 05:18
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Automated notice from GMAT Club BumpBot:

A member just gave Kudos to this thread, showing it’s still useful. I’ve bumped it to the top so more people can benefit. Feel free to add your own questions or solutions.

This post was generated automatically.
Moderators:
Bunuel
Math Expert
109830 posts
Krunaal
Tuck School Moderator
852 posts