Problem Solving

I think I don't understand the question... Also is it better to use a random # or just use the % to arrive at the answer?



ans is D

Picking 100 is a great way to solve many % problems on the GMAT.

Let's let Tracey's buying price be $100.

She sells at 40% mark up, so sale price is $140.

She pays 5% brokerage fee, so 5%(140) = $7, leaving her with a profit of $33.

Now she has to pay 40% of the profit in taxes, which means she has 60% of the profit left. 60% of $33 is $19.80.

So, she made a $19.80 profit on an investment of $100.. that's 19.8%. Pick choice (D).

Stuart Kovinsky wrote:Picking 100 is a great way to solve many % problems on the GMAT.

Let's let Tracey's buying price be $100.

She sells at 40% mark up, so sale price is $140.

She pays 5% brokerage fee, so 5%(140) = $7, leaving her with a profit of $33.

Now she has to pay 40% of the profit in taxes, which means she has 60% of the profit left. 60% of $33 is $19.80.

So, she made a $19.80 profit on an investment of $100.. that's 19.8%. Pick choice (D).

you're wonderful!!! i really appreciate all your help! my test is on friday... yikes!