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

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

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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

Source: GMAT Prep

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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

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Contact Rich at Rich.C@empowergmat.com

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Let's say the cost of each share is x and y, respectively.

Selling price = 120x/100 and 80y/100 respectively = 96

120x/100 = 96 => x=80
80y/100 = 96 => y =120

=> together cost = x+y = 200

together selling price = 2*96 = 192

=> loss of $8. Option C.

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