Graduate Management Admission Test (GMAT) Practice Test

What format should you pick for total numbers if applying percentages twice?

1. 100

2. 500

3. 1000

4. 2000

The correct answer is: 1000

When applying percentages consecutively, it is often easiest to use a base that can simplify calculations. Choosing 1000 as the base for total numbers allows for an efficient way to express percentage changes while maintaining whole numbers, especially when dealing with percentages that might result in decimal values. For example, if you are calculating 20% of a number, using 1000 means that 20% is simply 200. If you then apply another percentage to the result, the calculations will still yield whole numbers, making it easier to follow the math without dealing with fractions or decimals that could complicate the understanding of the outcome. Moreover, using a base of 1000 allows for greater flexibility in dealing with larger numbers without losing accuracy. This is particularly beneficial in contexts where the final percentage calculations might yield values in the hundreds or thousands, ensuring that the results remain whole numbers and straightforward to interpret. In contrast, lower bases like 100 or 500 might work for simpler calculations but can lead to more decimal points in intermediate steps, which can complicate the computational process. Therefore, a base of 1000 offers a practical and manageable approach when handling multiple percentage applications.