Indian Institute of Foreign Trade 2009 Solved Paper

Question : 119 of 122

Marks: +1, -0

M/s. Devi Radiograms, a shop which sells electronic gadgets, marks its merchandise 35% above the purchase price. Until four months ago, purchase price of one Philips DVD player was Rs. 3,000. During the last four months M/s. Devi Radiograms has received four monthly consignments of Philips DVD player at the purchase price of Rs. 2,750, Rs. 2,500, Rs. 2,400, and Rs. 2250. The average rate of decrease in the purchase price of DVD player during these four months is:

7.5%
8.20%
6.9%
7%

Validate

Solution:

decrease in purchase price for first month was

{3000−2750}/3000=0.083

decrease in purchase price for second month was

{2750−2500}/2750=0.0909

decrease in purchase price for the third month was

{2500-2400}/2500=0.04

decrease in purchase price for the fourth month was

{2400-2250}/2400=0.0625

Average decrease

={0.083+0.0909+0.04+0.0625}/4=0.069

i.e. 6.9%
Therefore our answer is option'C'

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