# GMAT Math : Calculating profit

## Example Questions

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### Example Question #11 : Calculating Profit

The German Club wants to make and sell cookies in order to raise $500 for a field trip. The equipment they want to use costs$400 to rent and to operate, and the ingredients for the cookies cost 45 cents per cookie. The German Club wants to sell the cookies for $2.25 each. At this price, how many cookies will they need to sell in order to earn back the money they paid for the ingredients and the equipment rental and make a profit of$500?

If  is the number of cookies sold, then which of the following equations represents the revenue function?

Explanation:

They want to earn at least $1,000, so the profit must be at least this - or Solve the inequality: The Spanish Club will need to sell 800 cookies. ### Example Question #14 : Calculating Profit Adam buys 12 broken cell phones for$50 each. If he fixes the cell phones and sells them each for $80, what is his total profit? Possible Answers:$260

$800$600

$960$360

$360 Explanation: Adam first buys 12 cell phones for$50 each, which means he spends:

12($50) =$600

He then sells the phones for $80 each, which means he earns: 12($80) = $960 The profit is the earnings minus the expenses, so Adam's profit is:$960 - $600 =$360

### Example Question #15 : Calculating Profit

It costs a company an average of  to build one of their custom woodchippers. The company makes an average profit of  of the cost of building a machine. To the nearest dollar, what is the average net profit the company makes per unit sold?

Explanation:

The company makes an average net profit that is  of the cost of building a machine. To calculate the average net profit in this case, simply do the following:

So, to the nearest dollar, the company's net profit is .

Note: avoid the trap answer . Our unrounded answer is , so we need to round down to  instead of rounding up to .

### Example Question #16 : Calculating Profit

The stock we just bought soared  percent, in other words our position increased by . How much did we initially invest?

Explanation:

A 55% increased of the unkown value  resulting as a  increase can be written as follow .

So

, which is the initial value.

### Example Question #17 : Calculating Profit

Mary, a very respected day trader, has the following postions: She invested  in stock A,  in stock B and  in stock C. What is her total return, in dollars on this portfolio considering the fact that since she invested in these stocks, A went up , B went down  and C increased .

Explanation:

To solve this problem, we simply have to multiply each position by their respective rate.

Note that we use a negative rate if the value decreased.

The final answer is then given by following equation

and we end up with .

### Example Question #18 : Calculating Profit

We have just lost  percent, or , of our investment, what was the amount invested before the loss?

Explanation:

To find the amount invested prior to the loss set up a proportion that represents what is given mathematically.

To write 60 percent of something is the same as,

If this is equivalent to \$6,000 then the statement to solve would read,

.

From here cross multiply and divide to solve for the amount invested prior to the loss.

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