A car dealership sold two cars: the first car at a 10% profit and the second car at a 10% loss, which gave them an overall profit margin of 5% from these two sales. If the dealership's total profit was $1000, what was the sale price of each car?
A) $5,000 and $1,000
B) $9,000 and $5,000
C) $11,000 and $9,000
D) $15,000 and $5,000
E) $20,000 and $10,000
OA is D
I'm struggling with the question, can an expert explain why it is D? Thanks a lot.
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Jay@ManhattanReview
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Say the price of the first car = $x, and that of the second car = $y.Roland2rule wrote:A car dealership sold two cars: the first car at a 10% profit and the second car at a 10% loss, which gave them an overall profit margin of 5% from these two sales. If the dealership's total profit was $1000, what was the sale price of each car?
A) $5,000 and $1,000
B) $9,000 and $5,000
C) $11,000 and $9,000
D) $15,000 and $5,000
E) $20,000 and $10,000
OA is D
I'm struggling with the question, can an expert explain why it is D? Thanks a lot.
Thus, the sale price of the first car = (100 + 10)% of x = 1.1x and the sale price of the second car = (100 - 10)% of y = 0.9y
Profit margin from the sale of the two cars = Sale price of the two cars - Cost price of the two cars = (1.1x + 0.9y) - (x + y) = 0.1 (x - y) ---(1)
We know that the profit margin is 5% (of the cost price) = 0.05(x + y) ---(2)
We are given that the dealership's total profit was $1000, thus
0.1 (x - y) = 1000 => x - y = 10,000 ---(3)
Also, 0.05(x + y) = 1000 => x + y = 1000/0.5 = 20,000 ---(4)
From (3) and (4), we get that x= $15000 and y = $5000.
The correct answer: D
Hope this helps!
-Jay
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GMATWisdom
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let me first tell you that if the given options are correct thenRoland2rule wrote:A car dealership sold two cars: the first car at a 10% profit and the second car at a 10% loss, which gave them an overall profit margin of 5% from these two sales. If the dealership's total profit was $1000, what was the sale price of each car?
A) $5,000 and $1,000
B) $9,000 and $5,000
C) $11,000 and $9,000
D) $15,000 and $5,000
E) $20,000 and $10,000
OA is D
I'm struggling with the question, can an expert explain why it is D? Thanks a lot.
he should have asked the purchase price of each item and not the sale price
ASSUMING HE IS ASKING THE PURCHASE PRICE OF EACH ITEM
overall 5% profit = $1000
therefore total purchase price of the items = (100/5)*1000= $20000
only in options C and D total purchase price becomes $20000
in option C, 10% of 11000 is 1100 and 10% of 9000 is 900
therefore overall profit becomes 1100-900= $200
in option D , 10% 15000 = 1500 and
10% of 5000 = 500 and the overall profit = difference between the two =$ 1000
hence option D is correct
