PSAT Math Multiple-Choice Question 373: Answer and Explanation

Question: 373

Malik purchased a mutual fund to help save for his daughter's college costs. During the first year, the price of the fund increased by 15 percent. The following year, the price increased by an additional 12 percent. To the nearest percent, what is the percent increase in the price of the stock for the two years?

• A. 24%
• B. 27%
• C. 28%
• D. 29%

Correct Answer: D

Explanation:

D

Difficulty: Medium

Getting to the Answer: Since the price of the mutual fund is not given and this is a percentage change question, plug in $100 for the initial price and then calculate the changes in sequence. After the first year, the price would have been $100 × (1 + 0.15) = $115. Then, the price at the end of the second year would have been $115 × (1 + 0.12) = $128.80. This is a 28.8% increase from the original $100 price. The question asks for the answer to the nearest percent, which is 29%, so (D) is correct.