On Monday, the opening price of a certain stock was $100

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BTGmoderatorLU: Moderator; Posts: 2505; Joined: Sun Oct 15, 2017 1:50 pm; Followed by:6 members

On Monday, the opening price of a certain stock was $100

by BTGmoderatorLU » Tue Jan 08, 2019 2:43 pm

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Source: Official Guide

On Monday, the opening price of a certain stock was $100 per share and its closing price was $110 per share. On Tuesday the closing price of the stock was 10 percent less than its closing price on Monday, and on Wednesday the closing price of the stock was 4 percent greater than its closing price on Tuesday. What was the approximate percentage change in the price of the stock from its opening price on Monday to its closing price on Wednesday?

A. A decrease of 6%
B. A decrease of 4%
C. A decrease of 1%
D. An increase of 3%
E. An increase of 4%

The OA is D

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Source: Beat The GMAT — Problem Solving | Tue Jan 08, 2019 2:43 pm

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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

by Brent@GMATPrepNow » Tue Jan 08, 2019 3:02 pm

BTGmoderatorLU wrote:Source: Official Guide

On Monday, the opening price of a certain stock was $100 per share and its closing price was $110 per share. On Tuesday the closing price of the stock was 10 percent less than its closing price on Monday, and on Wednesday the closing price of the stock was 4 percent greater than its closing price on Tuesday. What was the approximate percentage change in the price of the stock from its opening price on Monday to its closing price on Wednesday?

A. A decrease of 6%
B. A decrease of 4%
C. A decrease of 1%
D. An increase of 3%
E. An increase of 4%

The OA is D

On Monday, the opening price of a certain stock was $100 per share and its closing price was $110 per share.
On Tuesday the closing price of the stock was 10 percent less than its closing price on Monday,
We can say that the stock LOST 10% of its value.
OR we can say that the stock RETAINED 90% of its value.
In other words, Tuesday's closing price = 90% of $110 = (0.9)($110) = $99

On Wednesday, the closing price of the stock was 4 percent greater than its closing price on Tuesday
In other words, the stock increased by 4% of $99
In other words, Wednesday's closing price = $99 + (4% of $99)
ASIDE: since the question asks us for an approximate percentage change, we can APPROXIMATE the value of 4% of $99
4% of $100 = $4, so 4% of $99 is VERY CLOSE to $4
Wednesday's closing price â‰ˆ $99 + $4 â‰ˆ$103

What was the approximate percentage change in the price of the stock from its opening price on Monday to its closing price on Wednesday?
The stock increased from $100 to $103
This represents a 3% increase.

Answer: D

Cheers,
Brent

Brent Hanneson - Creator of GMATPrepNow.com

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by Scott@TargetTestPrep » Mon Jan 21, 2019 6:01 pm

BTGmoderatorLU wrote:Source: Official Guide

On Monday, the opening price of a certain stock was $100 per share and its closing price was $110 per share. On Tuesday the closing price of the stock was 10 percent less than its closing price on Monday, and on Wednesday the closing price of the stock was 4 percent greater than its closing price on Tuesday. What was the approximate percentage change in the price of the stock from its opening price on Monday to its closing price on Wednesday?

A. A decrease of 6%
B. A decrease of 4%
C. A decrease of 1%
D. An increase of 3%
E. An increase of 4%

The closing price on Monday was 110, and the closing price on Tuesday was 110 x .9 = 99.

The closing price on Wednesday was:

110 x 0.9 x 1.04 = 102.96, which is about 103.

We use the percent change formula: (New - Old)/Old x 100, so the percent change is:

(103 - 100)/100 x 100 = increase of 3%

Answer: D

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