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Lucy for $765

by sanju09 » Mon Aug 02, 2010 5:02 am
Dominic buys a gold plated wrist watch that is worth $600 at a credit of 4 months with the interest reckoning at 6 percent per annum, and sells it to Lucy for $765. What is the percent of his gain?
(A) 6
(B) 12
(C) 17½
(D) 20
(E) 25


[spoiler]Source: made by me for: www.avenuesabroad.org[/spoiler]
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by JeetGulia » Mon Aug 02, 2010 5:20 am
sanju09 wrote:Dominic buys a gold plated wrist watch that is worth $600 at a credit of 4 months with the interest reckoning at 6 percent per annum, and sells it to Lucy for $765. What is the percent of his gain?
(A) 6
(B) 12
(C) 17½
(D) 20
(E) 25


[spoiler]Source: made by me for: www.avenuesabroad.org[/spoiler]

Ans Is B 12%?
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by sanju09 » Mon Aug 02, 2010 5:28 am
JeetGulia wrote:
sanju09 wrote:Dominic buys a gold plated wrist watch that is worth $600 at a credit of 4 months with the interest reckoning at 6 percent per annum, and sells it to Lucy for $765. What is the percent of his gain?
(A) 6
(B) 12
(C) 17½
(D) 20
(E) 25


[spoiler]Source: made by me for: www.avenuesabroad.org[/spoiler]

Ans Is B 12%?
How? Always consider explaining your point, please.
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by selango » Mon Aug 02, 2010 5:41 am
I am not sure about this approach..

CP=600

6% per annum,So 2% for 4 months

Including credit price ll be 612

612[1+x/100]=765

x=25%

Pick E
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by JeetGulia » Mon Aug 02, 2010 5:55 am
sanju09 wrote:
JeetGulia wrote:
sanju09 wrote:Dominic buys a gold plated wrist watch that is worth $600 at a credit of 4 months with the interest reckoning at 6 percent per annum, and sells it to Lucy for $765. What is the percent of his gain?
(A) 6
(B) 12
(C) 17½
(D) 20
(E) 25


[spoiler]Source: made by me for: www.avenuesabroad.org[/spoiler]
I did estimation 6% per annum, so it will translate to about 0.48% per month or 5% per month compounded for 4 months one by one to get the final cost of the watch and calculated the % increase. Got 11% and 12% is an option in answer.

Not sure if correct or not?


Ans Is B 12%?
How? Always consider explaining your point, please.
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by JeetGulia » Mon Aug 02, 2010 5:58 am
JeetGulia wrote:
sanju09 wrote:
JeetGulia wrote:
sanju09 wrote:Dominic buys a gold plated wrist watch that is worth $600 at a credit of 4 months with the interest reckoning at 6 percent per annum, and sells it to Lucy for $765. What is the percent of his gain?
(A) 6
(B) 12
(C) 17½
(D) 20
(E) 25


[spoiler]Source: made by me for: www.avenuesabroad.org[/spoiler]
I did estimation 6% per annum, so it will translate to about 0.48% per month or 5% per month compounded for 4 months one by one to get the final cost of the watch and calculated the % increase. Got 11% and 12% is an option in answer.

Not sure if correct or not?

formula used: Monthly rate = (1 + annual rate)(1/12) - 1


Ans Is B 12%?
How? Always consider explaining your point, please.
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by selango » Mon Aug 02, 2010 9:05 pm
OA?
--Anand--
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by Asif » Mon Aug 02, 2010 10:09 pm
The question in not clear to me. It is asking to find "percentage of gain". But gain on what???? Dominic did not inject his own fund he just borrowed on credit against which he is supposed to pay interest. When there is no equity the entire gain is his profit against "0" investment. But if it is asked that "percentage of gain" on the credit amount, then the answer would be close to 25%. I would request you to post the anwer with explanation if any.
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