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If the dollar amount of sales at Store P was $800,000 for 20

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If the dollar amount of sales at Store P was $800,000 for 20 [#permalink] New post 12 Sep 2017, 14:05
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If the dollar amount of sales at Store P was $800,000 for 2006, what was the dollar amount of sales at that store for 2008 ?

A. $727,200

B. $792,000

C. $800,000

D. $880,000

E. $968,000

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Question: 1
Page: 127
Difficulty: medium


Disclaimer: the old version of this question is located here
[Reveal] Spoiler: OA

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Re: If the dollar amount of sales at Store P was $800,000 for 20 [#permalink] New post 12 Sep 2017, 14:07
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Explanation

According to Figure 8, if the dollar amount of sales at Store P was $800,000 for 2006, then it was 10 percent greater for 2007, which is 110 percent of that amount, or $880,000. For 2008 the amount was 90 percent of $880,000, which is $792,000.

B is best

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Re: If the dollar amount of sales at Store P was $800,000 for 20 [#permalink] New post 09 Feb 2020, 04:21
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Many people will INCORRECTLY choose C as their answer, because they feel that a 10% increase followed by a 10% decrease will get us back to where we started. This is a common misconception.

Let's solve the question.

Store P's 2006 sales = $800,000
The table says that, from 2006 to 2007, sales INCREASED 10%
10% of $800,000 = $80,000
So, the TOTAL sales for 2007 = $800,000 + $80,000 = $880,000

Next, the table says that, from 2007 to 2008, sales DECREASED 10%
10% of $880,000 = $88,000
So, the TOTAL sales for 2008 = $880,000 - $88,000 = $792,000

Answer:
[Reveal] Spoiler:
B


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Re: If the dollar amount of sales at Store P was $800,000 for 20 [#permalink] New post 09 Feb 2020, 10:13
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Explanation

According to Figure 8, if the dollar amount of sales at Store P was $800,000 for 2006, then it was 10 percent greater for 2007, which is 110 percent of that amount, or $880,000. For 2008 the amount was 90 percent of $880,000, which is $792,000. The correct answer is Choice B, $792,000.

Note that an increase of 10 percent for one year and a decrease of 10 percent for the following year does not result in the same dollar amount as the original dollar amount because the base that is used in computing the percents is $800,000 for the first change but $880,000 for the second change.
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