AAPL wrote:A shirt that costs k dollars is increased by 30%, then by an additional 50%. What is the new price of the shirt in dollars, in terms of k?
A. 0.2k
B. 0.35k
C. 1.15k
D. 1.8k
E. 1.95k
OA E

A shirt that costs k dollars is increased by 30%,
So, the new coast = k + (30% of k)
= k + 0.3k
= 1.3k

ASIDE
So, increasing a value by 30% is the same as multiplying that value by 1.3
Similarly, increasing a value by 20% is the same as multiplying that value by 1.2
And increasing a value by 78% is the same as multiplying that value by 1.78
etc

The price is increased by an additional 50%.
New price = (1.5)(1.3k)
= 1.95k

Answer: E

Cheers,
Brent

Hi All,

We're told that the price of a shirt that costs K dollars is increased by 30%, then that price is increased by an additional 50%. We're asked for the final price of the shirt in dollars, in terms of K. This question can be solved in a number of different ways - including Algebraically and by TESTing VALUES. Based on the answer choices though, you can actually answer this question with just a little logic.

Increasing a value by 30% and then increasing that new overall value by 50% is a concept that's sometimes referred to as "interest on top of interest." In simple terms, it means that the overall increase will be greater than the sum of the two individual increases (since the second increase will be based on the prior increased-value - and not the starting value). Here, that would mean that the overall increase would be GREATER than 30+50 = 80%. There's only one answer that matches...

Final Answer: E

GMAT assassins aren't born, they're made,
Rich

AAPL wrote:Manhattan Prep

A shirt that costs k dollars is increased by 30%, then by an additional 50%. What is the new price of the shirt in dollars, in terms of k?

A. 0.2k
B. 0.35k
C. 1.15k
D. 1.8k
E. 1.95k

OA E

The new price of the shirt is k x 1.3 x 1.5 = 1.95k.

Answer: E