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SUBSCRIPTION ANALYTICS: What is the annual customer retention rate? (1) Started year with 8,500 customers, ended with 9,200 customers, and acquired 1,800 new customers during the year (2) Lost 1,100 customers during the year from an opening base of 8,500 customers

GMAT · 2021 · Data Insights
Question:
SUBSCRIPTION ANALYTICS: What is the annual customer retention rate? (1) Started year with 8,500 customers, ended with 9,200 customers, and acquired 1,800 new customers during the year (2) Lost 1,100 customers during the year from an opening base of 8,500 customers

Options

(A) Statement (1) ALONE is sufficient, but statement (2) alone is not sufficient
(B) Statement (2) ALONE is sufficient, but statement (1) alone is not sufficient
(C) BOTH statements TOGETHER are sufficient, but NEITHER statement ALONE is sufficient
(D) EACH statement ALONE is sufficient
(E) Statements (1) and (2) TOGETHER are NOT sufficient
Answer: (D) EACH statement ALONE is sufficient

Explanation:
Statement (1): Retained customers = 9,200 - 1,800 = 7,400. Retention rate = 7,400/8,500 = 87.1%. Sufficient. Statement (2): Retention rate = (8,500 - 1,100)/8,500 = 87.1%. Sufficient.

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