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10 May 2017, 02:31
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B
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
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Question Stats:
91% (01:32) correct
9%
(02:16)
wrong
based on 64
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Jon invested $10000 in a certain stock exactly three years ago. The value of the stocks decreased by 10 percent during the first year, increased by 5 percent during the second year, and decreased by 10 percent during the third year. What is the value of the stocks today?
A. $8500
B. $8505
C. $9500
D. $10,395
E. $10,500
A. $8500
B. $8505
C. $9500
D. $10,395
E. $10,500
10 May 2017, 02:43
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Initial Stock Value: $10000
During 1st year, decrement of 10% hence, Value of stock= 0.9*10000 i.e. $9000
During 2nd year, increment of 5% hence, value of stock = 1.05*9000 i.e $9450
During 3rd year, decrement of 10% hence, Value of stock= 0.9*9450 i.e. $8505
Hence, Option B is the correct answer.
During 1st year, decrement of 10% hence, Value of stock= 0.9*10000 i.e. $9000
During 2nd year, increment of 5% hence, value of stock = 1.05*9000 i.e $9450
During 3rd year, decrement of 10% hence, Value of stock= 0.9*9450 i.e. $8505
Hence, Option B is the correct answer.
10 May 2017, 06:01
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Bunuel
In successive percent increases and/or decreases, another very fast way is to "multiply the multipliers" (see links below), then multiply that product by the original amount.
1st change is 10% decrease, hence 1 - .10 = .90
2nd change is 5% increase, hence 1 + .05 = 1.05
3rd change is another 10% decrease = .90
(.9)(1.05)(.9) = .8505
.8505 x $10,000 = $8,505
https://magoosh.com/gmat/2012/understanding-percents-on-the-gmat/
https://gmatclub.com/forum/excellent-method-for-calculating-successive-percentages-185973.html
