Multiple choice

Karen sold her house at a loss of 25 percent of the price that she originally paid for the house, and then bought another house at a price of 30 percent less than the price she originally paid for her first house. If she sold the first house for $225,000, what was her net gain, in dollars, for the two transactions?

  1. $15,000
  2. $25,000
  3. $60,000
  4. $75,000
  5. $90,000
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

First house: Sold for 225,000 at 25% loss. Original price = 225,000 / 0.75 = 300,000. Loss = 75,000. Second house: Bought at 30% less than 300,000 = 210,000. This is not a transaction with a gain/loss on the second house, but the net gain is the difference between the sale price and the total cost. Net gain = 225,000 (sale) - 300,000 (cost 1) + 300,000 (cost 1) - 210,000 (cost 2) = 15,000.