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Percent Problem ...

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Percent Problem ...

by camitava » Thu Sep 13, 2007 4:31 am
Guys pls tell me what will be the answer -

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1. The market value of a certain machine decreased by 30 percent of its purchase price each year. If the machine was purchased in 1982 for its market value of $8,000, what was its market value two years later?
(A) $8,000
(B) $5,600
(C) $3,200
(D) $2,400
(E) $800
Pls help me out ...
Correct me If I am wrong


Regards,

Amitava
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by therealphil77 » Thu Sep 13, 2007 5:11 am
I believe it to be C
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by therealphil77 » Thu Sep 13, 2007 5:12 am
I believe it to be C
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by kajcha » Thu Sep 13, 2007 5:48 am
IMO C.

The key to this question is "30 percent of its purchase price each year"

Every year the price goes down by 30*8000/100 = 2400

After first year price = 8000-2400 = 5600

After second year => 5600-2400 = 3200
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Percent problem

by wizardofwashington » Thu Sep 13, 2007 6:12 am
Agree with Kajcha..Ans is C .. This is a question where careful reading can help in avoiding a disaster..Looks easy but that subtle twist of 30 percent of its purchase price each year makes it more interesting..
A falling tree resounds... but a forest grows in silence...
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by camitava » Thu Sep 13, 2007 8:11 pm
Yop! I got all ur points but I am having some doubt. Refer the question once again -

1. The market value of a certain machine decreased by 30 percent of its purchase price each year. If the machine was purchased in 1982 for its market value of $8,000, what was its market value two years later?
(A) $8,000
(B) $5,600
(C) $3,200
(D) $2,400
(E) $800


Refer the bold lettered words. I thought the machine was bought in 1982 in its market value of $8000. So in the first year, the decreased market value however would be $8000 and in the second year, it would be 30% of $8000 i.e. $5600.
On the other hand, I took another approach to solve it. It was like -
In first year the market value would be = 70% of $8000 i.e $5600.
And in the second year it would be = 70% of 5600 i.e. 3920.
By this I did not find the suitable option. I would like to know the fault in this approach. Guys pls help me.

By the way, the correct answer given in the test paper is C itself. The way Kajcha solved the problem, is fine to get the answer, but I would like to know where is my my fault in my second approach.
Correct me If I am wrong


Regards,

Amitava
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by Bharat » Thu Sep 13, 2007 11:17 pm
Amitava, you have solved it using this approach:
"In first year the market value would be = 70% of $8000 i.e $5600.
And in the second year it would be = 70% of 5600 i.e. 3920. "

You are using 70% of REDUCED (or CURRENT) price & not the rather than 70% of PURCHASE price. Let me know if you need some more help.
Thanks.
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by camitava » Thu Sep 13, 2007 11:20 pm
Ohhhhhhhhhhh! Bharat thanks once again. Now I understood where I was failing. I really misunderstood the problem. Thanks once again.
Correct me If I am wrong


Regards,

Amitava
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