GMAT Exam Pack 2 the price per share of Company A's stock on

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riteshpatnaik: Junior | Next Rank: 30 Posts; Posts: 29; Joined: Wed Mar 09, 2016 12:55 am

GMAT Exam Pack 2 the price per share of Company A's stock on

by riteshpatnaik » Fri Dec 02, 2016 12:13 am

Last Year the price per share of Company A's stock on March 31 was 25percent higher than its price per share on March 1.By April 30 the stock's price per share was 20 percent lower than the price per share on March 1. What was the percent decrease in price per share of the stock from March 31 to April 30?

A.5%
B.25%
C.36%
D.45%
E.56%

I solved it this way

Let the price per stock on March 1 be -100.
Price per share on March 31- 125
Price per share on April 30 - 80/100 * 125 = 100

% decrease = 125-100/100 = 25%. But the answer is C- 36%. Please help

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Source: Beat The GMAT — Problem Solving | Fri Dec 02, 2016 12:13 am

melguy: Master | Next Rank: 500 Posts; Posts: 335; Joined: Mon Mar 21, 2011 11:31 pm; Location: Australia / India; Thanked: 37 times; Followed by:2 members

by melguy » Fri Dec 02, 2016 12:32 am

Your approach is correct but you made a small mistake.

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GMATGuruNY: GMAT Instructor; Posts: 15539; Joined: Tue May 25, 2010 12:04 pm; Location: New York, NY; Thanked: 13060 times; Followed by:1906 members; GMAT Score:790

by GMATGuruNY » Fri Dec 02, 2016 5:07 am

riteshpatnaik wrote:Last Year the price per share of Company A's stock on March 31 was 25percent higher than its price per share on March 1. By April 30 the stock's price per share was 20 percent lower than the price per share on March 1. What was the percent decrease in price per share of the stock from March 31 to April 30?

A.5%
B.25%
C.36%
D.45%
E.56%

I solved it this way

Let the price per stock on March 1 be -100.
Price per share on March 31- 125
Price per share on April 30 - 80/100 * 125 = 100

% decrease = 125-100/100 = 25%. But the answer is C- 36%. Please help

The portion in red does not accurately reflect the following statement:
By April 30 the stock's price per share was 20 percent lower than the price per share on March 1.
Since the price per share on March 1 = 100, and the price per share on April 30 must be 20% lower, the price per share on April 30 = 100 - (20% of 100) = 100 - 20 = 80.

What was the percent decrease in price per share of the stock from March 31 to April 30?
Percent decrease from 125 to 80 = (125-80)/125 * 100 = 45/5 * 4 = 36%.

The correct answer is C.

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by [email protected] » Fri Dec 02, 2016 10:34 am

Hi riteshpatnaik,

Both melguy and Mitch have properly explained this prompt, so I won't rehash any of that here. Instead, I want to point out the importance of noting the details in each question (and taking the proper notes). The GMAT question-writers are savvy enough to know the types of common mistakes that Test Takers could make when dealing with Quant questions, so one (or more) of the wrong answers will often be the result of a 'math mistake' that you might make. Unfortunately, you'll never realize that you've made the mistake in the first place (you'll just see "your answer" among the 5 choices and assume that you're correct). To avoid those types of errors, you have to be rigorous about staying organized and doing all of the work 'on the pad' (including labeling your work). You knew the perfect way to deal with this question - which is great; now you just have to work on your precision.

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

Contact Rich at [email protected]

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Jeff@TargetTestPrep: GMAT Instructor; Posts: 1462; Joined: Thu Apr 09, 2015 9:34 am; Location: New York, NY; Thanked: 39 times; Followed by:22 members

by Jeff@TargetTestPrep » Sat Dec 10, 2016 5:26 am

riteshpatnaik wrote:Last Year the price per share of Company A's stock on March 31 was 25percent higher than its price per share on March 1.By April 30 the stock's price per share was 20 percent lower than the price per share on March 1. What was the percent decrease in price per share of the stock from March 31 to April 30?

A.5%
B.25%
C.36%
D.45%
E.56%

We are given that last year the price per share of Company A's stock on March 31 was 25 percent higher than its price per share on March 1, and that by April 30 the stock's price per share was 20 percent lower than the price per share on March 1.

If we let p = the price per share of Company A's stock on March 1, we can create the following equations:

price on March 31st = 1.25p

price on April 30th = 0.8p

We need to determine the percent decrease in price per share of the stock from March 31st to April 30th. We can use the percent change equation:

Percent change = (new - old)/old x 100

Percent decrease = [(0.8p - 1.25p)/(1.25p)] x 100

Percent decrease = [(80p - 125p)/(125p)] x 100

Percent decrease = [(-45p)/(125p)] x 100

Percent decrease = (-9/25) x 100 = -9 x 4 = -36

Thus, there was a 36 percent decrease in price per share.

Answer: C

Jeffrey Miller
Head of GMAT Instruction
[email protected]