PSAT Math Grid-Ins Question 51: Answer and Explanation

Question: 51

The Great Depression began in 1929 and lasted until 1939. It was a period of extreme poverty, marked by low prices and high unemployment. The main catalytic event to the Great Depression was the Wall Street Crash (stock market crash). The Dow, which measures the health of the stock market, started Black Thursday (October 24, 1929) at approximately 306 points.

The stock market had been in steady decline since its record high the month before. If the market had declined by 19.5 percent between its record high and opening on Black Thursday, what was the approximate value of the Dow at its record high? Round your answer to the nearest whole point.

Correct Answer: 380

Explanation:

380

Difficulty: Medium

Category: Problem Solving and Data Analysis/Rates, Ratios, Proportions, and Percents

Getting to the Answer: You can use the formula Percent × whole = part to solve this problem, but you will first need to think conceptually about what the question is asking. The question is asking for the Dow value before the 19.5% decrease to 306. This means that 306 represents 100 - 19.5 = 80.5% of what the stock market was at its record high. Fill these amounts into the equation and solve for the original whole, the record high Dow value:

Rounded to the nearest whole point, the record high was approximately 380 points.