Profit discount question

Hi sukhman,

What is the source of this question? I ask because it's not written in proper GMAT "style", so you might want to invest in practice materials that are more realistic. That having been said, you can solve it by TESTing VALUES.

IF...
Cost Price = $100
Marked Price = $140
10% Profit Price = $100 + (.1)($100) = $110

1st discount = 10% off....
$140 - (.1)($140) = $126

For the 2nd discount, we now have to reduce $126 by a certain percent to get it to $110. That difference in price would be $16...

$16/$126 = 8/63 = about 13%

Final Answer: B

GMAT assassins aren't born, they're made,
Rich

Rich's response is the best way to tackle questions of this nature (successive increases and decreases), so I won't rehash that here.

I would, however, like to examine how one might convert 8/63 to a percent.

One approach is to use long division to divide 63 into 8. Yuck!

Another approach is to recognize (in your head) that....
7/63 = 1/9 ≈ 11%
9/63 = 1/7 ≈ 14%

Since 8/63 is between 7/63 and 9/63, we know that the percent equivalent to 8/63 must be BETWEEN 11% and 14%
Answer choice B is the one that meets this condition.

Another approach is to recognize that 8/63 is VERY CLOSE in value to 8/64
8/64 = 1/8 = 12/5%, which means 8/63 is a little bigger than 12.5% (once again, B is the best answer)

For more information about dealing with successive increases and decreases check out this free video: https://www.gmatprepnow.com/module/gmat ... video/1078 (starting around 3:40)

Cheers,
Brent