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

Question

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

GSBae · Answer

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%.

Answer:E

Lucky2783 · Answer

i hope you meant to say Answer E.

Lucky2783 · Answer

X*1.25*1.25 = 1.5625 X 
so there is a net increase of 56.25% . Answer E.

GSBae · Answer

I did! Whoops. Thanks for the correction!

EMPOWERgmatRichC · Answer

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:  E

GMAT assassins aren't born, they're made,
Rich

dream21 · Answer

Let Orignal Cost be 100
First Increase = 100 *1.25 = 125
Second Increase = 125 * 1.25 = 156.25

Total Increase = 56.25
Ans : E

PareshGmat · Answer

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

Bunuel · Answer

MAGOOSH OFFICIAL SOLUTION: increasefollowedbyincrease_text.PNG

OptimusPrepJanielle · Answer

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: https://www.optimus-prep.com/gmat-on-demand-course

SavageBrother · Answer

Picked an easy number.

100*1,25 = 125
125*1,25 = 156,25
156,25 - 100 = 56,25

vinayash · Answer

Hi,

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

Thanks!!

kanusha · Answer

Original = 100
New1 = 100 ( 1.25 ) = 125
New2 = 125(1.25) = 156.25
 \frac{Change}{Original} = \frac{Percent}{100} 
E

Mansi89 · Answer

I can’t do calculation : 1.25 * 1.25 = 156.25 
Can anybody please tell me how to do these types of calculations faster?

Thank you.

Posted from my mobile device

EMPOWERgmatRichC · Answer

Hi Mansi89,

Most GMAT questions can be approached in more than one way (and sometimes the necessary calculations can even be done in different ways - or even estimated).

To start, this 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

As an alternative, you might also consider converting your decimals to fractions:

(1.25)(1.25) = (5/4)(5/4) = 25/16 = 1 9/16

Since 1/16 is a little more than 6%, 9(a little more than 6%) = a little more than 54%

GMAT assassins aren't born, they're made,
Rich

bumpbot · Answer

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

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