A certain company's yearly revenue was 20% less in 2005 than in 2004.

Question

A certain company's yearly revenue was 20% less in 2005 than in 2004 and 10% greater in 2006 than in 2005. If the company's revenue in 2007 was equal to it's yearly revenue in 2004, which of the following is closest to the percent increase in the company's yearly revenue from 2006 to 2007?

(A) 5%
(B) 10%
(C) 12%
(D) 14%
(E) 15%

Show Spoiler

Attachment:

2024-01-25_12-42-51.png

gmatophobia · Accepted Answer

Let's assume that the company's revenue in 2004 was $100

Revenue in 2005 = 20% less than 2004 = $80

Revenue in 2006 = 10% greater than 2005 = $88

Revenue in 2007 = Equal to 2004 = $100

Increase = $100 - $88 = $12

% increase =  \frac{12}{88} * 100 = 13.XX

Option D

MrWhite · Answer

My method is as follows:

2004: X
2005: $\frac{4X}{5}$
2006: $\frac{4X}{5} * \frac{11}{10} = \frac{22X}{25}$
2007: X

% increase from 2006 to 2007 = $\frac{3}{25}$ = 12%

I am getting 12% - (C), but official answer says its 14% - (D).

Could someone please help me understand where I am going wrong

rakshitkonchada · Answer

Everything's fine, but you made a small mistake
it's not 3/25, it's 3/22, %change = (Next-Previous/Previous)*100
=(1-(22/25))/(22/25)
=(3/25)/(22/25)
=3/22
=0.136
Multiply by 100, it's 13.6%, close to 14%

Jake7Wimmer · Answer

'04 = 100
'05 = 80 
'06 = 88
'07 = 100

'06 -> '07 = 88 -> 100

Change to 8800 and 10,000

1% of 8800 is 88 -> Eliminate a) and B) and we will try D) First.

88x14 = (80+8)(10+4) = 800+320+80+32 = 1232 (I used foil just to multiply 88x14 so that I won't make a mistake) 
8800+1232 = 10,032 which is aprox 10,000

Thus 14% and D) is answer

sayan640 · Answer

KarishmaB  Is there smart way to approach this question apart from the conventional wya i.e (12/ 88) * 100 = 13.6 = 14% increase.

KarishmaB · Answer

There are 3 successive percentage changes which lead to overall no change i.e. a multiplication factor of 1 overall. \frac{4}{5} * \frac{11}{10} * x = 1 x = \frac{50}{44} which means an increase of 6/44 *100 = about 14% Answer (D) Video on multiplication factors in percentages: https://youtu.be/HxnsYI1Rws8 Post on successive percentage changes: https://anaprep.com/arithmetic-successi ... e-changes/

bumpbot · Answer

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.

A certain company's yearly revenue was 20% less in 2005 than in 2004.

Prep Toolkit

Top 5 GMAT Debrief Videos

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards

GMAT Problem Solving (PS) Questions

A certain company's yearly revenue was 20% less in 2005 than in 2004.

Prep Toolkit

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards