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You are here: Home » GMAT Test Prep Questions » Percentages, Fractions » Question 1

The GMAT Sample Math question is an arithmetic problem solving question from the topic percentages and fraction. The concept tested in this question is that of percentage increase in price leading to a corresponding percent decrease in quantity.

If the price of gasoline increases by 25% and Ron intends to spend only 15% more on gasoline, by what % should he reduce the quantity of petrol that he buys?

A. 10%
B. 12.5%
C. 8%
D. 12%
E. 6.66%

The correct choice is (C) and the correct answer is 8%.

Let the price of 1 litre of gasoline be $x and let Ron initially buy 'y' litres of gasoline.

Therefore, he would have spent $xy on gasoline.

When the price of gasoline increases by 25%, the new price per litre of gasoline is 1.25x.

Ron intends to increase the amount he spends on gasoline by 15%.

i.e., he is willing to spend xy + 15% of xy = 1.15xy

Let the new quantity of gasoline that he can get be 'q'.

Then, 1.25x * q = 1.15xy

Or q = = 0.92y.

As the new quantity that he can buy is 0.92y, he gets 0.08y lesser than what he used to get earlier.

Or a reduction of 8%.

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