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## A newly-opened retail store made $400 profit on the initial ## Timer 00:00 ## Your Answer A B C D E ## Global Stats Difficult Source: e-GMAT A newly-opened retail store made$400 profit on the initial expenditure of $25,000 and then made$1,200 profit on the next $80,000 expenditure. By approximately what percent did the ratio of profit to expenditure change from the first$25,000 expenditure to the next $80,000 expenditure? A. 6.67% decrease B. 6.25% decrease C. 0 D. 6.25% increase E. 6.67% increase The OA is B. ### GMAT/MBA Expert GMAT Instructor Joined 09 Oct 2010 Posted: 1449 messages Followed by: 32 members Upvotes: 59 BTGmoderatorLU wrote: Source: e-GMAT A newly-opened retail store made$400 profit on the initial expenditure of $25,000 and then made$1,200 profit on the next $80,000 expenditure. By approximately what percent did the ratio of profit to expenditure change from the first$25,000 expenditure to the next $80,000 expenditure? A. 6.67% decrease B. 6.25% decrease C. 0 D. 6.25% increase E. 6.67% increase $\left. \begin{gathered} {\text{I}}{\text{.}}\,\,\,\frac{{400}}{{25000}} = \frac{2}{{125}} \hfill \\ {\text{II}}{\text{.}}\,\,\,\frac{{1200}}{{80000}} = \frac{3}{{200}} \hfill \\ \end{gathered} \right\}\,\,\,\,?\,\, = \Delta \% \left( {\,{\text{I}}\,\,\, \to \,\,\,{\text{II}}\,} \right)$ $? = \frac{{\frac{3}{{200}} - \frac{2}{{125}}}}{{\frac{2}{{125}}}} = \frac{{125}}{2}\left( {\frac{{3 \cdot \boxed5}}{{8 \cdot 25 \cdot \boxed5}} - \frac{{2 \cdot \boxed8}}{{5 \cdot 25 \cdot \boxed8}}} \right) = \frac{{5 \cdot 25}}{2}\left( { - \frac{1}{{5 \cdot 25 \cdot 8}}} \right) = - \frac{1}{{16}}$ $? = - \frac{1}{4}\left( {\frac{1}{4}} \right) = - \frac{1}{4}\left( {25\% } \right) = - 6\frac{1}{4}\% \,\,\,\,\, \Rightarrow \,\,\,\,\left( B \right)$ This solution follows the notations and rationale taught in the GMATH method. Regards, Fabio. _________________ Fabio Skilnik :: GMATH method creator ( Math for the GMAT) English-speakers :: https://www.gmath.net Portuguese-speakers :: https://www.gmath.com.br ### GMAT/MBA Expert GMAT Instructor Joined 25 Apr 2015 Posted: 2456 messages Followed by: 18 members Upvotes: 43 BTGmoderatorLU wrote: Source: e-GMAT A newly-opened retail store made$400 profit on the initial expenditure of $25,000 and then made$1,200 profit on the next $80,000 expenditure. By approximately what percent did the ratio of profit to expenditure change from the first$25,000 expenditure to the next $80,000 expenditure? A. 6.67% decrease B. 6.25% decrease C. 0 D. 6.25% increase E. 6.67% increase The first profit-to-expenditure ratio is: 400/25000 = 4/250 = 2/125 = 16/1000 The second profit-to-expenditure ratio is: 1200/80,000 = 12/800 = 3/200 = 15/1000 So the percent change is: (15/1000 - 16/1000)/(16/1000) x 100 -1/1000 x 1000/16 x 100 = -1/16 x 100 = -6.25 percent The negative coefficient is indicative of a decrease; thus, the change was a 6.25 percent decrease. Answer: B _________________ Scott Woodbury-Stewart Founder and CEO scott@targettestprep.com See why Target Test Prep is rated 5 out of 5 stars on BEAT the GMAT. Read our reviews • 5-Day Free Trial 5-day free, full-access trial TTP Quant Available with Beat the GMAT members only code • 1 Hour Free BEAT THE GMAT EXCLUSIVE Available with Beat the GMAT members only code • Magoosh Study with Magoosh GMAT prep Available with Beat the GMAT members only code • Free Trial & Practice Exam BEAT THE GMAT EXCLUSIVE Available with Beat the GMAT members only code • FREE GMAT Exam Know how you'd score today for$0

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