In a certain year the price of gasoline rose by during January, fell by during February, rose by during March, and fell by during April. The price of gasoline at the end of April was the same as it had been at the beginning of January. To the nearest integer, what is ?
- A)
- B)
- C)
- D)
- E)
Answer
B
Key insight
Percent changes multiply: 1.2 times 0.8 times 1.25 = 1.2, so April must multiply by 5/6, a drop of one-sixth, about 17 percent.
Solution
Track the price as a product of monthly factors. Starting from :
At the end of March the price is , or . To return to , April must multiply by , which is a decrease of .
To the nearest integer, .
The answer is .
Why this works
A rise of followed by a fall of does not cancel; each change scales the current price, so the combined effect is the product of the factors. To undo a factor , multiply by ; the required percent drop is , not .
Alternative approach
Use a concrete price of : after January , after February , after March . Dropping from to is a decrease out of , i.e. .
The trap
Adding and subtracting the percents (20 - 20 + 25 = 25) instead of multiplying the growth factors.
Common mistakes
- Adding and subtracting the percents (20 - 20 + 25 = 25) instead of multiplying the growth factors.
- Computing the drop as a percent of the original price (20 out of 100, choice C) instead of the March price.
Techniques
Set up the equation/formula and compute; no special trick needed