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Expert replies
by pierce22884 » Thu Feb 18, 2010 2:52 pm
The price of a microchip declines by 67 percent every 6 months. At this rate, approximately how many years will it take for the price of an $81 microchip to reach $1?
A. 1.5 years
B. 2 years
C. 3 years
D. 13 years
E. 13.5 years

OA:
B) After 6 months, the $81 chip is reduced in price by about 2/3 (a good fractional approximation of 67%). Since reducing something by 2/3 is the same as multiplying by 1/3, multiply $81 by 1/3 to get $27. After 12 months (1 year), the $27 chip goes down in price to $9. After 18 months (1.5 years), the price goes down to $3, and after 24 months (2 years) the price goes down to about $1. The answer is (B), two years.Note: The question asks approximately how many years, so you can safely round 67% to 2/3 for this problem.

Is there any way to solve this problem faster than what is recommended? Can you set this up in a R x T=W scenario?

Thanks!
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Source: — Problem Solving |

by harsh.champ » Thu Feb 18, 2010 3:41 pm
pierce22884 wrote:The price of a microchip declines by 67 percent every 6 months. At this rate, approximately how many years will it take for the price of an $81 microchip to reach $1?
A. 1.5 years
B. 2 years
C. 3 years
D. 13 years
E. 13.5 years

OA:
B) After 6 months, the $81 chip is reduced in price by about 2/3 (a good fractional approximation of 67%). Since reducing something by 2/3 is the same as multiplying by 1/3, multiply $81 by 1/3 to get $27. After 12 months (1 year), the $27 chip goes down in price to $9. After 18 months (1.5 years), the price goes down to $3, and after 24 months (2 years) the price goes down to about $1. The answer is (B), two years.Note: The question asks approximately how many years, so you can safely round 67% to 2/3 for this problem.

Is there any way to solve this problem faster than what is recommended? Can you set this up in a R x T=W scenario?

Thanks!
Well the short approach is the one as listed in the OA. It can be further reduced by using exponents.33% = 1/3 Thus 81 x (1/3)^x = 1 [Let x be the no. of 6-monthly]
Hence, x =4(6 monthly) = 2 years
I guess there wouldn't be any shorter approach than this. :)
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by pierce22884 » Thu Feb 18, 2010 4:05 pm
Well the short approach is the one as listed in the OA. It can be further reduced by using exponents.33% = 1/3 Thus 81 x (1/3)^x = 1 [Let x be the no. of 6-monthly]
Hence, x =4(6 monthly) = 2 years
I guess there wouldn't be any shorter approach than this.

Harsh.Champ - Great way to approach it! Thanks.
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by thephoenix » Thu Feb 18, 2010 10:38 pm
1=81(1-67/100)^x------>1/81=(33/100)^x------------->(1/3)^x=1/81------->x=4 since reduction is in evervy 4 mnth implies that in total 24 mnths that is in 2 years it will reduce to 1

formula used is of compund intrest since its reduction the sign is minus
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