A customer's monthly water bill was $75.74. Due to a rate increase, her monthly bill is now $79.86. To the...
GMAT Problem-Solving and Data Analysis : (PS_DA) Questions
A customer's monthly water bill was \(\$75.74\). Due to a rate increase, her monthly bill is now \(\$79.86\). To the nearest tenth of a percent, by what percent did the amount of the customer's water bill increase?
4.1%
5.1%
5.2%
5.4%
1. TRANSLATE the problem information
- Given information:
- Original bill: \(\$75.74\)
- New bill: \(\$79.86\)
- Need: percent increase to nearest tenth
- The phrase "by what percent did the amount increase" means we need to find percent increase using the formula: \(\frac{\mathrm{new\ value} - \mathrm{original\ value}}{\mathrm{original\ value}} \times 100\%\)
2. INFER the solution approach
- Percent increase problems always compare the change to the original amount
- We need three steps: find the change, divide by original, convert to percent and round
3. SIMPLIFY through the calculations
- Find the absolute increase:
\(\$79.86 - \$75.74 = \$4.12\) - Apply the percent increase formula:
\((\$4.12 \div \$75.74) \times 100\%\) - Calculate the division (use calculator):
\(\$4.12 \div \$75.74 = 0.0544...\) - Convert to percentage:
\(0.0544... \times 100\% = 5.44...\%\)
4. APPLY CONSTRAINTS for the final answer
- Round to the nearest tenth of a percent:
\(5.44...\% \approx 5.4\%\)
Answer: D. 5.4%
Why Students Usually Falter on This Problem
Most Common Error Path:
Weak INFER skill: Using the new bill amount as the denominator instead of the original amount.
Students might think "the bill is now $79.86, so I should divide by $79.86" and calculate \((\$4.12 \div \$79.86) \times 100\% = 5.16...\% \approx 5.2\%\). This leads them to select Choice C (5.2%).
Second Most Common Error:
Poor TRANSLATE reasoning: Misunderstanding what the problem is asking for and just finding the absolute difference.
Students might calculate \(\$79.86 - \$75.74 = \$4.12\) and think this $4.12 represents "4.1%" without doing the percentage calculation. This causes them to select Choice A (4.1%).
The Bottom Line:
Percent increase problems require careful attention to which value serves as the base for comparison - it's always the original value, never the new value. The key insight is that "percent increase" specifically measures how much the original amount grew.
4.1%
5.1%
5.2%
5.4%