Increasing the original price

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BTGmoderatorDC: Moderator; Posts: 7187; Joined: Thu Sep 07, 2017 4:43 pmFollowed by: 23 members

by BTGmoderatorDC » Sun Dec 17, 2017 4:35 am

Increasing the original price of an article by 15% and then increasing the new price by 15% again is equivalent to increasing the original price by what %?

A. 34
B. 40
C. 68
D. 88
E. 102

Can some experts help me find the best solution in this problem?

OA A

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Source: Beat The GMAT — Problem Solving | Sun Dec 17, 2017 4:35 am

EconomistGMATTutor: GMAT Instructor; Posts: 555; Joined: Wed Oct 04, 2017 4:18 pmFollowed by: 12 members; Thanked: 180 times

by EconomistGMATTutor » Sun Dec 17, 2017 7:29 am

Increasing the original price of an article by 15% and then increasing the new price by 15% again is equivalent to increasing the original price by what %?

A. 34
B. 40
C. 68
D. 88
E. 102

Can some experts help me find the best solution in this problem?

OA A

Hi lheiannie07,
Let's take a look at your question.

If the original price of the item is '100'.
15% increase means:
$$=\left(15\%\right)100$$ $$=\left(\frac{15}{100}\right)100=15$$

Total price of the item after 15% increase is:
$$=100+15=115$$

15% increase in the new price:
$$=\left(15\%\right)\left(115\right)$$
$$=\left(0.15\right)\left(115\right)=17.25$$

Total price of the item after 15% increase again:
$$=115+17.25$$
$$=132.25$$
$$=100+32.25$$

So the increase in the original price if 32.25%.
Which is approximately equal to Option A.

Hence Option A is correct.

Hope it helps.
I am available if you'd like any follow up.

GMAT Prep From The Economist
We offer 70+ point score improvement money back guarantee.
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Scott@TargetTestPrep: GMAT Instructor; Posts: 8157; Joined: Sat Apr 25, 2015 10:56 amFollowed by: 29 members; Location: Los Angeles, CA; Thanked: 43 times

by Scott@TargetTestPrep » Sat Sep 21, 2019 11:21 am

BTGmoderatorDC wrote:Increasing the original price of an article by 15% and then increasing the new price by 15% again is equivalent to increasing the original price by what %?

A. 34
B. 40
C. 68
D. 88
E. 102

Can some experts help me find the best solution in this problem?

OA A

Since 1.15 x 1.15 = 1.3225, increasing by 15% twice is equivalent to increasing the original prince by 32.35%.

Answer : A (That is closest to the actual answer.)

Scott Woodbury-Stewart
Founder and CEO
[email protected]

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