Last month, a florist gave 7 percent of her sales revenue to

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

Last month, a florist gave 7 percent of her sales revenue to

by BTGmoderatorLU » Fri Nov 23, 2018 3:11 pm

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Source: Veritas Prep

Last month, a florist gave 7 percent of her sales revenue to her employees in bonuses. This month, she gave them 5 percent of her sales revenue, and sales were up 20 percent from last month. By approximately what percentage did the bonuses change from last month to this month?

A. -14.3%
B. -2%
C. 0%
D. 2%
E. 6%

The OA is A.

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Source: Beat The GMAT — Problem Solving | Fri Nov 23, 2018 3:11 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

by Brent@GMATPrepNow » Fri Nov 23, 2018 3:14 pm

BTGmoderatorLU wrote:Source: Veritas Prep

Last month, a florist gave 7 percent of her sales revenue to her employees in bonuses. This month, she gave them 5 percent of her sales revenue, and sales were up 20 percent from last month. By approximately what percentage did the bonuses change from last month to this month?

A. -14.3%
B. -2%
C. 0%
D. 2%
E. 6%

The OA is A.

Choose a "nice" number for the sales revenue

Let $100 = LAST MONTH's revenue
So, $120 = THIS MONTH's revenue (since sales were up 20 percent from last month)

LAST month, a florist gave 7 percent of her sales revenue to her employees in bonuses
So, bonuses = 7% of $100
= $7

THIS month, she gave them 5 percent of her sales revenue
So, bonuses = 5% of $120
= $6

By approximately what percentage did the bonuses change from last month to this month?
We must calculate the percent change from $7 to $6

Percent change = 100(new - old)/old
= 100($6 - $7)/$7
= -100/7
â‰ˆ-14

Answer: A

Cheers,
Brent

Brent Hanneson - Creator of GMATPrepNow.com

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Scott@TargetTestPrep: GMAT Instructor; Posts: 8086; Joined: Sat Apr 25, 2015 10:56 am; Location: Los Angeles, CA; Thanked: 43 times; Followed by:29 members

by Scott@TargetTestPrep » Fri Mar 29, 2019 6:44 am

BTGmoderatorLU wrote:Source: Veritas Prep

Last month, a florist gave 7 percent of her sales revenue to her employees in bonuses. This month, she gave them 5 percent of her sales revenue, and sales were up 20 percent from last month. By approximately what percentage did the bonuses change from last month to this month?

A. -14.3%
B. -2%
C. 0%
D. 2%
E. 6%

The OA is A.

We can assume the revenue for last month was $1,000, so the bonus for last month was $70. Since the revenue this month went up 20% from last month, the revenue for this month was $1,200, and hence the bonus for this month was $60. So the percent change is:

(60 - 70)/70 = -10/70 = -1/7 = -14.3%

Answer: A

Scott Woodbury-Stewart
Founder and CEO
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