GMAT PS #2

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imadummy: Junior | Next Rank: 30 Posts; Posts: 15; Joined: Wed May 21, 2008 6:55 am

GMAT PS #2

by imadummy » Tue Jun 03, 2008 1:48 pm

Whenever Bianca travels to Italy she brings back Gucci bags that she sells to her friends. The bags she buys in Italy she gets at a 60% discount to American prices. She sells the bags to her friends at a 25% higher price than what she paid for them. After one trip, she sells bags to her friends that would have $4000 in American Stores. What is Bianca's profit?

400
600
1600
2200
2400

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Source: Beat The GMAT — Problem Solving | Tue Jun 03, 2008 1:48 pm

VP_RedSoxFan: GMAT Instructor; Posts: 85; Joined: Thu May 01, 2008 12:56 pm; Location: Salt Lake City, UT; Thanked: 24 times; GMAT Score:750+

by VP_RedSoxFan » Tue Jun 03, 2008 1:49 pm

Working backwards, we can calculate that the $4000 in "American" prices was purchased in Italy by Bianca at 60% off, so $1,600 (don't confuse the discount amount with the actual cost here).

The question says that Bianca sells them for 25% more than she paid, which would exactly equal her profit...25% of $1,600 = $400

Answer = [A]

Hope this helps, good luck. Still love the username, makes me chuckle...

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imadummy: Junior | Next Rank: 30 Posts; Posts: 15; Joined: Wed May 21, 2008 6:55 am

by imadummy » Tue Jun 03, 2008 1:52 pm

You were right on Red Sox. I took the discount amount of $2,400 instead of the $1,600 when I calculated the 25% profit.

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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 » Mon Dec 18, 2017 5:25 pm

imadummy wrote:Whenever Bianca travels to Italy she brings back Gucci bags that she sells to her friends. The bags she buys in Italy she gets at a 60% discount to American prices. She sells the bags to her friends at a 25% higher price than what she paid for them. After one trip, she sells bags to her friends that would have $4000 in American Stores. What is Bianca's profit?

400
600
1600
2200
2400

Note: We must assume that the question is asking about a single bag.

Since Bianca sold a bag that would have cost $4,000 in American stores, she actually paid 0.4 x 4,000 = $1,600 for the bag. She then sold the bag for 1.25 x 1600 = $2,000. Thus, she made a profit of $400.

Answer: A

Jeffrey Miller
Head of GMAT Instruction
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