gsm8k-0002

# GSM8K Problem 3

Josh decides to try flipping a house.  He buys a house for $80,000 and then puts in $50,000 in repairs.  This increased the value of the house by 150%.  How much profit did he make?

Reason step by step, then give ONLY the final answer on the last line as \boxed{ANSWER}.

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We are given:

- Josh buys a house for **$80,000**.
- He spends **$50,000** on repairs.
- After repairs, the **value of the house increased by 150%**.

We need to find his **profit**, which is:

$$
\text{Profit} = \text{Final Value of House} - \text{Total Cost}
$$

---

### Step 1: Understand what "increased by 150%" means.

An increase of 150% means the **value becomes original value + 150% of original value**, i.e., **250% of original value**.

But — important: What is the "original value" here?

The problem says: *"This increased the value of the house by 150%"* — the "this" refers to the repairs. So, the **repairs caused a 150% increase in the house's value**.

But what was the value *before* repairs? Typically, when someone buys a house, its market value is at least what they paid (unless it's a distressed property), but the problem doesn’t explicitly state the pre-repair value.

However, in real estate flipping problems like this, unless otherwise stated, we assume that the **purchase price reflects the pre-repair value** — i.e., before repairs, the house was worth $80,000.

So:

- Pre-repair value = $80,000  
- Repairs cost = $50,000  
- Value increase = 150% of **pre-repair value** = 150% × $80,000 = $120,000  
- So post-repair value = $80,000 + $120,000 = **$200,000**

Alternatively: 250% of $80,000 = 2.5 × 80,000 = $200,000.

---

### Step 2: Total cost

Josh spent:

- $80,000 (purchase)
- $50,000 (repairs)  
→ Total cost = $130,000

---

### Step 3: Profit

Profit = Final value − Total cost = $200,000 − $130,000 = **$70,000**

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\boxed{70000}