Bobby bought 2 shares, and which he sold for $96 each. If he

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by AAPL » Sat Sep 15, 2018 8:02 am

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Bobby bought 2 shares, and which he sold for $96 each. If he had a profit of 20% on the sale of one of the shares but a loss of 20% on the sale of the other share, then on the sale of both shares Bobby had...

A. A profit of 10
B. A profit of 8
C. A loss of 8
D. A loss of 10
E. Neither a profit nor a loss

OA C.

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Source: Beat The GMAT — Problem Solving | Sat Sep 15, 2018 8:02 am

fskilnik@GMATH: GMAT Instructor; Posts: 1449; Joined: Sat Oct 09, 2010 2:16 pmFollowed by: 33 members; Thanked: 59 times

Bobby bought 2 shares, and which he sold for $96 each. If he

by fskilnik@GMATH » Sat Sep 15, 2018 4:37 pm

AAPL wrote:GMAT Prep

Bobby bought 2 shares, and which he sold for $96 each. If he had a profit of 20% on the sale of one of the shares but a loss of 20% on the sale of the other share, then on the sale of both shares Bobby had...

A. A profit of 10
B. A profit of 8
C. A loss of 8
D. A loss of 10
E. Neither a profit nor a loss

(Common) Assumption: although not explicitly mentioned, we are dealing with profit of 20% over the cost on the corresponding sale. The same for the loss.

\[?\,\,\,:\,\,\,{\text{profit/loss}}\,\,\left( \$ \right)\]
\[1{\text{st}}\,\,{\text{share}}:\,\,\,\,\,96 = \,\,\left( {1 + \frac{1}{5}} \right)\,\,{\text{cost}}\,\,\,\,\,\, \Rightarrow \,\,\,\,\,\,{\text{cost}} = \frac{5}{6}\left( {96} \right)\,\,\,\,\,\, \Rightarrow \,\,\,\,\,\,{\text{profit}} = \frac{1}{6}\left( {96} \right) = \underleftrightarrow {\frac{{60 + 36}}{6}} = 16\,\,\,\left( \$ \right)\]
\[2{\text{nd}}\,\,{\text{share}}:\,\,\,\,\,96 = \,\,\left( {1 - \frac{1}{5}} \right)\,\,{\text{cost}}\,\,\,\,\,\, \Rightarrow \,\,\,\,\,\,{\text{cost}} = \frac{5}{4}\left( {96} \right)\,\,\,\,\,\, \Rightarrow \,\,\,\,\,\,{\text{loss}} = \frac{1}{4}\left( {96} \right) = \underleftrightarrow {\frac{{80 + 16}}{4}} = 24\,\,\left( \$ \right)\]
\[?\,\, = \,\,\,16 + \left( { - 24} \right) = - 8\,\,\left( \$ \right)\]

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

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Scott@TargetTestPrep: GMAT Instructor; Posts: 8136; Joined: Sat Apr 25, 2015 10:56 amFollowed by: 29 members; Location: Los Angeles, CA; Thanked: 43 times

by Scott@TargetTestPrep » Wed Sep 19, 2018 5:10 pm

AAPL wrote:GMAT Prep

Bobby bought 2 shares, and which he sold for $96 each. If he had a profit of 20% on the sale of one of the shares but a loss of 20% on the sale of the other share, then on the sale of both shares Bobby had...

A. A profit of 10
B. A profit of 8
C. A loss of 8
D. A loss of 10
E. Neither a profit nor a loss

We are given that Bobby bought 2 shares, which he sold for $96 each, and that he made a 20% profit on the sale of one share and had a loss of 20% on the sale of the other share. We can set up the following equations in which c = the cost of the first share and d = the cost of the second share.

For the first share, with a profit of 20%, we have:

Profit = 0.2c

Since profit = revenue - cost, we have:

96 - c = 0.2c

96 = 1.2c

c = 80

Thus, the profit for the first share was 96 - 80 = 16 dollars.

For the 20% loss we have:

Profit = -0.2d

Since profit = revenue - cost, we have:

96 - d = -0.2d

96 = 0.8d

d = 120

Thus, the loss for the second share was 96 - 120 = 24 dollars.

Since Bobby has a profit of 16 dollars and a loss of 24 dollars, he has a net loss of 8 dollars.

Answer: C

Scott Woodbury-Stewart
Founder and CEO
[email protected]

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[email protected]: Elite Legendary Member; Posts: 10392; Joined: Sun Jun 23, 2013 6:38 pmFollowed by: 511 members; Location: Palo Alto, CA; Thanked: 2867 times; GMAT Score:800

by [email protected] » Wed Sep 19, 2018 8:23 pm

Hi All,

We're told that Bobby bought 2 shares, which he sold for $96 each, he had a profit of 20% on the sale of one of the shares but a loss of 20% on the sale of the other share. We're asked to find the TOTAL profit or loss on the sale of the two shares. This question essentially comes down to creating two equations and then solving for the original purchase price of each share.

The 20% profit share --> X + .2X = 96
The 20% loss share --> Y - .2Y = 96

1.2X = 96
12X = 960
X = 960/12 = $80
For the first share, the PROFIT was $96 - $80 = $16

.8Y = 96
8Y = 960
Y = 960/8 = $120
For the second share, the LOSS was $120 - $96 = $24

$16 profit - $24 loss = Total LOSS of $8

Final Answer: C

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

Contact Rich at [email protected]

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