At the beginning of 1992, Maria's stock portfolio was worth $600,000. During 1992, the portfolio's value increased by 95%. During the next year, the portfolio increased its worth by only 5%. What was Maria's portfolio worth, in dollars, by the end of 1993?
1,180,000
1,200,000
1,200,300
1,228,500
1,330,000
Whats the calculation ?
This topic has expert replies
- candygal79
- Senior | Next Rank: 100 Posts
- Posts: 49
- Joined: Mon Feb 10, 2014 1:18 am
- Followed by:3 members
- GMATGuruNY
- GMAT Instructor
- Posts: 15539
- Joined: Tue May 25, 2010 12:04 pm
- Location: New York, NY
- Thanked: 13060 times
- Followed by:1906 members
- GMAT Score:790
The first percentage -- 95% -- applies only to the principal of $600,000:candygal79 wrote:At the beginning of 1992, Maria's stock portfolio was worth $600,000. During 1992, the portfolio's value increased by 95%. During the next year, the portfolio increased its worth by only 5%. What was Maria's portfolio worth, in dollars, by the end of 1993?
1,180,000
1,200,000
1,200,300
1,228,500
1,330,000
Since 5% of 600,000 = 30,000, 95% = 600,000 - 30,000 = 570,000.
The second percentage -- 5% -- applies both to the principal AND to the $570,000 in interest earned above:
5% of 600,000 = 30,000.
5% of 570,000 = 23,500.
Final total:
600,000 + 570,000 + 30,000 + 23,500.
The correct answer must end in 500.
The correct answer is D.
Private tutor exclusively for the GMAT and GRE, with over 20 years of experience.
Followed here and elsewhere by over 1900 test-takers.
I have worked with students based in the US, Australia, Taiwan, China, Tajikistan, Kuwait, Saudi Arabia -- a long list of countries.
My students have been admitted to HBS, CBS, Tuck, Yale, Stern, Fuqua -- a long list of top programs.
As a tutor, I don't simply teach you how I would approach problems.
I unlock the best way for YOU to solve problems.
For more information, please email me (Mitch Hunt) at [email protected].
Student Review #1
Student Review #2
Student Review #3
Followed here and elsewhere by over 1900 test-takers.
I have worked with students based in the US, Australia, Taiwan, China, Tajikistan, Kuwait, Saudi Arabia -- a long list of countries.
My students have been admitted to HBS, CBS, Tuck, Yale, Stern, Fuqua -- a long list of top programs.
As a tutor, I don't simply teach you how I would approach problems.
I unlock the best way for YOU to solve problems.
For more information, please email me (Mitch Hunt) at [email protected].
Student Review #1
Student Review #2
Student Review #3