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GATE 2020 CY – Question 5

General Aptitude · Quantitative Aptitude: Data Interpretation, Arithmetic and Number Computation · 1 mark · Multiple choice

A product moves through five successive supply-chain levels P → Q → R → S → T → Customers. At each of the five levels its price rises 25%. Production cost at P is Rs. 120 per unit. What price do customers pay?

  1. Rs. 187.50
  2. Rs. 234.38
  3. Rs. 292.96
  4. Rs. 366.21

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Show answer and explanation

Correct answer: (D) Rs. 366.21

Explanation

Each level multiplies price by 1.25, including the increase applied at P. Five increases give $120(1.25)^5=366.2109375$ rupees. Thus D, Rs. 366.21. Adding five lots of 25% of the original cost would ignore compounding.

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