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Over the course of a single week, the price of a company's

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Over the course of a single week, the price of a company's

by BTGmoderatorLU » Thu Aug 16, 2018 3:23 pm

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Source: Veritas Prep

Over the course of a single week, the price of a company's stock rose by 10%. If the following week the company's stock rose by 10% of the new price, by what percent did the stock increase over the two week period?

A. 19%
B. 20%
C. 21%
D. 120%
E. 121%

The OA is C.
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by Brent@GMATPrepNow » Thu Aug 16, 2018 3:34 pm
BTGmoderatorLU wrote:Source: Veritas Prep

Over the course of a single week, the price of a company's stock rose by 10%. If the following week the company's stock rose by 10% of the new price, by what percent did the stock increase over the two week period?

A. 19%
B. 20%
C. 21%
D. 120%
E. 121%
Let's assign a "nice" value to the original price.

Let $100 be the original price (BEFORE any increases)

Over the course of a single week, the price of a company's stock rose by 10%.
10% of $100 = $10
So, the NEW price = $100 + $10 = $110

The following week the company's stock rose by 10% of the new price
10% of $110 = $11
So, the NEW NEW price = $110 + $11 = $121

By what percent did the stock increase over the two week period?
ORIGINAL price = $100
FINAL price = $121

Percent increase = (100)(new - old)/old
(100)(21 - 100)/100
= 21 (percent)

Answer: C

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Brent
Brent Hanneson - Creator of GMATPrepNow.com
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by Jeff@TargetTestPrep » Mon Aug 20, 2018 10:46 am
BTGmoderatorLU wrote:Source: Veritas Prep

Over the course of a single week, the price of a company's stock rose by 10%. If the following week the company's stock rose by 10% of the new price, by what percent did the stock increase over the two week period?

A. 19%
B. 20%
C. 21%
D. 120%
E. 121%
If the original price of the stock was n, then after two weeks, the new price was 1.1 x 1.1 x n = 1.21n.

Thus, the stock increased by 21% over the two-week period.

Answer: C

Jeffrey Miller
Head of GMAT Instruction
[email protected]

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