Question

In: Statistics and Probability

Between January 14, 2015, and July 14, 2015, the average price of regular gasoline increased from $ 1.99 per gallon to $ 2.60 per gallon.

 

Between January 14, 2015, and July 14, 2015, the average price of regular gasoline increased from $ 1.99 per gallon to $ 2.60 per gallon.

A) Calculate the percentage increase in price

B) If the price of gasoline decreases by 30% from its July 14, 2015, level of $ 2.60 per gallon, what would be the new price?

C) Can a variable increase more than 100%? Yes or no? Give an example.

D) Can a variable decrease more than 100%. Yes or no? Give an example.

E) If the stock market increases 30% in January and 25% in February. Has the stock market increased 55% from January 1st to February 28th? Yes or no? Explain why

Solutions

Expert Solution

Old Value =1.99

New value =2.60

a)

% increase in the price is given by

so the required % is 30.65%

b)

if there is 30% decrease in the value from 2.60

30% of 2.6 =2.6*0.3=0.78

so new price =2.60-0.78 =1.82

c)

Yes,its possible that a variable can increase more than 100% for example any stock value become more than the double of the stock current value in given period.

d)

Yes,its possible that a variable can derease more than 100% for example loss of more than double of the current value.

e)

let stock price on first January is x so

after increasing by 30% stock price will be 1.3x at the starting of February

now increasing by 25% in February then new stock price =1.25*1.3x=1.625x

so % increase in the price = (1.625x/x)*100 =62.5%

Hence

stock market increased from january 1st to 28 th february by 62.5% not by 55%.


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