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

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

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

by BTGmoderatorDC » Mon Nov 26, 2018 10:38 pm

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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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Source: Beat The GMAT — Problem Solving | Mon Nov 26, 2018 10:38 pm

swerve: Legendary Member; Posts: 2499; Joined: Sun Oct 29, 2017 2:04 pm; Followed by:6 members

by swerve » Tue Nov 27, 2018 9:58 am

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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by [email protected] » Tue Nov 27, 2018 1:56 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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Scott@TargetTestPrep: GMAT Instructor; Posts: 8086; Joined: Sat Apr 25, 2015 10:56 am; Location: Los Angeles, CA; Thanked: 43 times; Followed by:29 members

by Scott@TargetTestPrep » Wed Mar 27, 2019 6:06 pm

BTGmoderatorDC wrote: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

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 from one share of stock and a loss of 24 dollars from the other share, he has a net loss of 8 dollars.

Answer: C

Scott Woodbury-Stewart
Founder and CEO
[email protected]