Last month, a florist gave 7 percent of her sales revenue to

BTGmoderatorDC wrote:Last month, a florist gave 7 percent of her sales revenue to her employees in bonuses. This month, she gave them 5 percent of her sales revenue, and sales were up 20 percent from last month. By approximately what percentage did the bonuses change from last month to this month?

(A) –14.3%
(B) –2%
(C) 0%
(D) 2%
(E) 6%

OA A

Source: Veritas Prep

Say, last month the sales revenue was $100, thus, the bonus = 7% of 100 = $7

Thus, this month the sales revenue would be $100 + 20% of 100 = $120, thus, the bonus = 5% of 120 = $6

Percentage by which the bonuses change from last month to this month = [(6 – 7)/7]*100% = –14.28% = ~–14.3%

The correct answer: A

Hope this helps!

-Jay
_________________
Manhattan Review GMAT Prep

Locations: New York | Hyderabad | Mexico City | Toronto | and many more...

Schedule your free consultation with an experienced GMAT Prep Advisor! Click here.

BTGmoderatorDC wrote:Last month, a florist gave 7 percent of her sales revenue to her employees in bonuses. This month, she gave them 5 percent of her sales revenue, and sales were up 20 percent from last month. By approximately what percentage did the bonuses change from last month to this month?

(A) –14.3%
(B) –2%
(C) 0%
(D) 2%
(E) 6%

We can assume the revenue for last month was $1,000, so the bonus for last month was $70. Since the revenue this month went up 20% from last month, the revenue for this month was $1,200 and hence the bonus for this month was $60. So the percent change is:

(60 - 70)/70 = -10/70 = -1/7 = -14.3%

Answer: A

BTGmoderatorDC wrote:Last month, a florist gave 7 percent of her sales revenue to her employees in bonuses. This month, she gave them 5 percent of her sales revenue, and sales were up 20 percent from last month. By approximately what percentage did the bonuses change from last month to this month?

(A) –14.3%
(B) –2%
(C) 0%
(D) 2%
(E) 6%

OA A

Source: Veritas Prep

Choose a "nice" number for the sales revenue

Let $100 = LAST MONTH's revenue
So, $120 = THIS MONTH's revenue (since sales were up 20 percent from last month)

LAST month, a florist gave 7 percent of her sales revenue to her employees in bonuses
So, bonuses = 7% of $100
= $7

THIS month, she gave them 5 percent of her sales revenue
So, bonuses = 5% of $120
= $6

By approximately what percentage did the bonuses change from last month to this month?
We must calculate the percent change from $7 to $6

Percent change = 100(new - old)/old
= 100($6 - $7)/$7
= -100/7
≈-14

Answer: A

Cheers,
Brent