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GMAT Prep - Q35

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maxim730: Senior | Next Rank: 100 Posts; Posts: 76; Joined: Tue Dec 26, 2006 11:26 amFollowed by: 3 members

by maxim730 » Wed Mar 14, 2007 6:24 pm

See attached Image. I'm having trouble setting up an equation for the problem.. I'm missing something simple.

Thanks!!!

Answer: C

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Source: Beat The GMAT — Problem Solving | Wed Mar 14, 2007 6:24 pm

jayhawk2001: Community Manager; Posts: 789; Joined: Sun Jan 28, 2007 3:51 pmFollowed by: 1 member; Location: Silicon valley, California; Thanked: 30 times

by jayhawk2001 » Wed Mar 14, 2007 8:27 pm

Let the buying price for the stocks be x and y resp.

1.2x = 96, so x = 80. Hence profit = 16$
.8y = 96, so y = 120. Hence loss = 24$

So net loss = 8$

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Neo2000: Legendary Member; Posts: 519; Joined: Sat Jan 27, 2007 7:56 am; Location: India; Thanked: 31 times

by Neo2000 » Wed Mar 14, 2007 11:59 pm

This kind of a transaction will always result in a loss and the %loss will be of the form

(X^2)/100 where X = %Profit or %Loss

In this case (20^2)/100 = 400/100 = 4% loss

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BTGmoderatorRO: Moderator; Posts: 772; Joined: Wed Aug 30, 2017 6:29 pmFollowed by: 6 members

by BTGmoderatorRO » Sat Nov 04, 2017 11:38 pm

let the cost price of the two shares of stock be x and y.
on X, he had a profit of 20% and on Y, he had a loss of 20%.
since selling price= cost price +/- cost price (%profit).
this implies that
selling price of the first share = x + x(20%) (profit)
96= x + 0.2x
96= 1.2x
$$x=\frac{96}{1.2}=$80$$
Also, the selling price of the second share = y - y(20%) (loss)
96= y - 0.2y
96= 0.8y
$$y=\frac{96}{0.8}=$120$$
Now, on the sale of both shares combined, selling prices= $(96 + 96) = $192
since profit/loss = x+y = 120+80= $200
since profit/loss = selling price - cost price (192-200) = -$8 (loss)
and percent profit/loss = (profit/loss amount * 100%) / cost price
$$=\frac{8}{200}\cdot100\%\ =4\%$$

therefore, he had a loss of 4% on both shares combined which is equivalent to a loss of $8.

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Scott@TargetTestPrep: GMAT Instructor; Posts: 8152; Joined: Sat Apr 25, 2015 10:56 amFollowed by: 29 members; Location: Los Angeles, CA; Thanked: 43 times

by Scott@TargetTestPrep » Mon Nov 11, 2019 1:21 pm

maxim730 wrote:See attached Image. I'm having trouble setting up an equation for the problem.. I'm missing something simple.

Thanks!!!

Answer: C

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

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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] » Sun Nov 24, 2019 11:23 am

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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