Question

If the USA dollar becomes cheap by 12% over its original cost and the cost of German mark increased by 20%, what will be the gain? (The selling price is not altered.)

• A. 10%
• B. 20%
• C. 15%
• D. 7.5%

Hint:

When calculating the gain or loss based on percentage changes in components, calculate the new total cost and subtract it from the original cost to find the gain.

Answer 1

The Correct Option is B

Let the total cost be \( C \), and assume the initial cost of the components is divided between the German mark and the USA dollar, which are 30% and 50% of the total cost, respectively. - The cost of the German mark increases by 20%, so the new cost of the German component is \( 1.2 \times 0.3C = 0.36C \). - The cost of the USA dollar decreases by 12%, so the new cost of the USA component is \( 0.88 \times 0.5C = 0.44C \). The new total cost is: \[ \text{New total cost} = 0.36C + 0.44C = 0.8C. \] The gain is the difference between the original cost and the new cost: \[ \text{Gain} = C - 0.8C = 0.2C. \] Thus, the gain is 20%.