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Percent DS. can someone show me where my logic is wrong

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hutch27 Master | Next Rank: 500 Posts
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Percent DS. can someone show me where my logic is wrong

Post Thu May 23, 2013 12:33 pm
In 1994, Company X recorded profits that were 10% greater than in 1993, and in 1993 the company’s profits were 20% greater than they were in 1992. What were the company’s profits in 1992?

(1) In 1994, the company’s profits were $100,000 greater than in 1993.

(2) For every $3.00 in profits earned in 1992, Company X earned $3.96 in 1994.

OA is A but can someone please explain statement 2? Please look at my rephrasing of the target question because that's how i prefer to set up questions like this

I did it like this..
..
..
..
1992 1993 1994
p p(1+20/100) p(1+20/100)(1+10/100)

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Post Thu May 23, 2013 4:12 pm
hutch27 wrote:
In 1994, Company X recorded profits that were 10% greater than in 1993, and in 1993 the company’s profits were 20% greater than they were in 1992. What were the company’s profits in 1992?

(1) In 1994, the company’s profits were $100,000 greater than in 1993.

(2) For every $3.00 in profits earned in 1992, Company X earned $3.96 in 1994.

OA is A but can someone please explain statement 2? Please look at my rephrasing of the target question because that's how i prefer to set up questions like this

I did it like this..
..
..
..
1992 1993 1994
p p(1+20/100) p(1+20/100)(1+10/100)
You're overcomplicating the problem.
The question stem simply gives the RATIO of the three years.
Let 1992 = 100.
Since 1993 is 20% greater than 1992, 1993 = 100 + .2(100) = 120.
Since 1994 is 10% greater than 1993, 1994 = 120 + .1(120) = 132.
Thus:
1994 : 1993 : 1992 = 132 : 120 : 100.
Given this ratio, if we know the profit in any of the 3 years -- or the DIFFERENCE between any two years -- we can determine the profit in EACH of the 3 years (and thus the profit in 1992).

Statement 1: In 1994, the company’s profits were $100,000 greater than in 1993.
SUFFICIENT.

Statement 2: For every $3.00 in profits earned in 1992, Company X earned $3.96 in 1994.
In other words:
1994 : 1992 = 396 : 300 = 132 : 100.
This statement only confirms the ratio given in the question stem.
INSUFFICIENT.

The correct answer is A.

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