Hi,

The answer is C) but my calculation was
selling price 60*1.25=75
discount 0.2=15
the gross profit is zero.. (which is unlikely happen...)

Can anyone check which part is wrong?

. A merchant purchased a jacket for $60 and then determined a selling price that equalled the purchase price of the jacket plus a markup that was 25 percent of the selling price. During a sale, the merchant discounted the selling price by 20 percent and sold the jacket. What was the merchant's gross profit on this sale?
(A) $0
(B) $3
(C) $4
(D) $12
(E) $15

A merchant purchased a jacket for $60 and then determined a selling price that equalled the purchase price of the jacket plus a markup that was 25 percent of the selling price. During a sale, the merchant discounted the selling price by 20 percent and sold the jacket. What was the merchant�s gross profit on this sale?
(A) $0
(B) $3
(C) $4
(D) $12
(E) $15

Let the sale price be x. Now the markup = .25x

So selling price = $60 + .25x

.25x + 60 = x
.75x = 60
x = 60/.75 = $80

Now the discount given by the merchant = .2*80 = $16

SP after discount = $80 - 16 = $64

Thus net profit made by the merchant = $64 - $60 = $4