From 2003 to 2004 the profits made by a company increased by 10%. A year later in 2005, the profits of this company decreased to their 2003 value. By what percent did the profits decrease from 2004 to 2005?Â
A) 10Â
B) 5Â
C) 1Â
D) 20Â
E) 9
The answer is 9 and I really don't understand how to solve that..Please help me in detail solutions..Thanks you guys so much
Please ! Help me
This topic has expert replies
-
- Newbie | Next Rank: 10 Posts
- Posts: 3
- Joined: Sun Sep 18, 2016 12:25 pm
GMAT/MBA Expert
- Brent@GMATPrepNow
- GMAT Instructor
- Posts: 16207
- Joined: Mon Dec 08, 2008 6:26 pm
- Location: Vancouver, BC
- Thanked: 5254 times
- Followed by:1268 members
- GMAT Score:770
Let's test some values.sunsun2z16 wrote:From 2003 to 2004 the profits made by a company increased by 10%. A year later in 2005, the profits of this company decreased to their 2003 value. By what percent did the profits decrease from 2004 to 2005?Â
A) 10Â
B) 5Â
C) 1Â
D) 20Â
E) 9
Let's say the 2003 profits are $100
After a 10% increase, the 2004 profits are $110
In 2005, the profits are back to $100
So, we're going from $110 to $100
Percent decrease = 100(change)/original value
= 100(110- 100)/110
= (100)(10)/110
≈ 9.1%
Related Video: https://www.gmatprepnow.com/module/gmat ... video/1078
- MartyMurray
- Legendary Member
- Posts: 2131
- Joined: Mon Feb 03, 2014 9:26 am
- Location: https://martymurraycoaching.com/
- Thanked: 955 times
- Followed by:140 members
- GMAT Score:800
To better understand this percent change concept, consider the following example.
2003: 100
2004: 200 (up 100% from 2003)
2005: 100 (Notice, returning from 200 to 100 did not require a 100% decrease. 200 to 100 is a 50% decrease.)
Here's another
1991: 1000
1992: 1250 (up 250/1000 or 25%)
1993: 1000 (down 250/1250 or 1/5 or 20%)
So you always have to consider the change and the number at the beginning.
Now let's consider your question.
2004: 1.10x (up 10%)
2005: x (down .10x/1.10x or 1/11, which is approximately .09 or 9%)
The correct answer is E.
2003: 100
2004: 200 (up 100% from 2003)
2005: 100 (Notice, returning from 200 to 100 did not require a 100% decrease. 200 to 100 is a 50% decrease.)
Here's another
1991: 1000
1992: 1250 (up 250/1000 or 25%)
1993: 1000 (down 250/1250 or 1/5 or 20%)
So you always have to consider the change and the number at the beginning.
Now let's consider your question.
2003: xFrom 2003 to 2004 the profits made by a company increased by 10%. A year later, in 2005, the profits of this company decreased to their 2003 value. By what percent did the profits decrease from 2004 to 2005?
A) 10
B) 5
C) 1
D) 20
E) 9
2004: 1.10x (up 10%)
2005: x (down .10x/1.10x or 1/11, which is approximately .09 or 9%)
The correct answer is E.
Marty Murray
Perfect Scoring Tutor With Over a Decade of Experience
MartyMurrayCoaching.com
Contact me at [email protected] for a free consultation.
Perfect Scoring Tutor With Over a Decade of Experience
MartyMurrayCoaching.com
Contact me at [email protected] for a free consultation.
- MBA Challengers
- Senior | Next Rank: 100 Posts
- Posts: 51
- Joined: Fri Sep 09, 2016 11:59 pm
- Thanked: 20 times
Percentage is a very relative concept, depending on the base. The percentage of 10 on a base of 100 changes to the percentage of 10 on a base of 200.
In practical terms, if you are 1 person on a deserted island, you are 100% of the population. Whereas if you are 1 person in a bigger city like Hakuna Matata with a population of 100, you will be 1% of the population.
That is the main concept tested in this question. In short, what is 10% of 100 when reversed. 10% of 100 makes it 100 + (10/100)*100 = 100 + 10 = 110.
Now when it reverts back to the value of 100, the change %age will be (10/110)*100 = ~9.1%
In practical terms, if you are 1 person on a deserted island, you are 100% of the population. Whereas if you are 1 person in a bigger city like Hakuna Matata with a population of 100, you will be 1% of the population.
That is the main concept tested in this question. In short, what is 10% of 100 when reversed. 10% of 100 makes it 100 + (10/100)*100 = 100 + 10 = 110.
Now when it reverts back to the value of 100, the change %age will be (10/110)*100 = ~9.1%
Log on to www.mbachallengers.com for
Easy strategic GMAT prep
For any queries mail us at [email protected]
Follow MBA Challengers on Facebook
Easy strategic GMAT prep
For any queries mail us at [email protected]
Follow MBA Challengers on Facebook
GMAT/MBA Expert
- [email protected]
- Elite Legendary Member
- Posts: 10392
- Joined: Sun Jun 23, 2013 6:38 pm
- Location: Palo Alto, CA
- Thanked: 2867 times
- Followed by:511 members
- GMAT Score:800
Hi sunsun2z16,
It looks like each of the explanations has properly explained the 'math' behind this question (and how to TEST VALUES to quickly get to the correct answer), so I won't rehash any of that here. Instead, I'm going to point out the relative importance of knowing all of the necessary formulas and math rules that you'll be expected to use on Test Day. Here, the concept is "percent change", which is a rather important formula in the realm of business - and you'll be asked to use it at least once on the Official GMAT. That formula can be defined in a couple of different ways:
Percent Change = (New - Old)/Old = (Difference)/Original
The key to using this formula is make sure that you clearly define the 'old' value and the 'new' value. As long as you do that, then the calculations involved are almost always fairly straight-forward.
GMAT assassins aren't born, they're made,
Rich
It looks like each of the explanations has properly explained the 'math' behind this question (and how to TEST VALUES to quickly get to the correct answer), so I won't rehash any of that here. Instead, I'm going to point out the relative importance of knowing all of the necessary formulas and math rules that you'll be expected to use on Test Day. Here, the concept is "percent change", which is a rather important formula in the realm of business - and you'll be asked to use it at least once on the Official GMAT. That formula can be defined in a couple of different ways:
Percent Change = (New - Old)/Old = (Difference)/Original
The key to using this formula is make sure that you clearly define the 'old' value and the 'new' value. As long as you do that, then the calculations involved are almost always fairly straight-forward.
GMAT assassins aren't born, they're made,
Rich
-
- Newbie | Next Rank: 10 Posts
- Posts: 3
- Joined: Sun Sep 18, 2016 12:25 pm
Tks everyone so much..I don't think I have a lot of answers like that..And I'm so appreciate if you guys can help me in other questions I will post at this page, tks again ^^