At the beginning of 1992, Maria's stock portfolio was worth $600,000. During 1992, the portfolio's value...

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Fri Apr 10, 2020 4:20 am

Economist GMAT

At the beginning of 1992, Maria's 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?

A. 1,180,000
B. 1,200,000
C. 1,200,300
D. 1,228,500
E. 1,330,000

OA D

Say at the beginning of 1992, Maria's portfolio was worth $100. I assumed this value as this would make things easier for computation. Later, I will multiply the result by 6,000 to get the final answer.

Portfolio's value at the end of 1992 = 100 + 100*95% = 195
Portfolio increased in value during 1993 = 195*5% = 9.70

Portfolio's value at the end of 1993 = 195 + 9.70 = appx 205

Thus, the portfolio's value at the end of 1993 = appx 205 * 6,000 = $1,230,000

The closest answer is Option D.

The correct answer: D

Hope this helps!

-Jay
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AAPL wrote: ↑

Fri Apr 10, 2020 4:20 am

Economist GMAT

At the beginning of 1992, Maria's 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?

A. 1,180,000
B. 1,200,000
C. 1,200,300
D. 1,228,500
E. 1,330,000

OA D

Maria's portfolio worth, in dollars, by the end of 1993 is:

600,000 x 1.95 x 1.05 = 1,228,500

Answer: D