A computer appliance dealer bought a computer

Expert replies

BTGmoderatorDC: Moderator; Posts: 7187; Joined: Thu Sep 07, 2017 4:43 pmFollowed by: 23 members

by BTGmoderatorDC » Tue Jan 16, 2018 8:33 pm

A computer appliance dealer bought a computer at a wholesale price of $500 and then sold it at a 20 percent discount off the suggested retail price. If the dealer made a 12 percent profit on the wholesale price, what was the suggested retail price of the computer?

A) $560
B) $580
C) $660
D) $700
E) $730

Please show me the best solution in this?

OA D

Like this post

Source: Beat The GMAT — Problem Solving | Tue Jan 16, 2018 8:33 pm

DrMaths: Senior | Next Rank: 100 Posts; Posts: 82; Joined: Mon Jan 15, 2018 2:01 am

by DrMaths » Wed Jan 17, 2018 5:09 am

Start by identifying gkey facts separately:
1) Selling price = 20% off the Retail price (R) is the same as 80% of R = 0.8R
2) Profit = 12% of 500 = 0.12 *500 = 60
3) Profit = Selling price - Purchase price
So, substituting all facts into equation (3) gives
60 = 0.8R - 500
Rearranging gives
0.8R = 560
x10 gives
8R = 5600
/8 gives
R = 700
ANSWER = D

Like this post

EconomistGMATTutor: GMAT Instructor; Posts: 555; Joined: Wed Oct 04, 2017 4:18 pmFollowed by: 12 members; Thanked: 180 times

by EconomistGMATTutor » Wed Jan 17, 2018 6:44 am

Hello lheiannie07.

Let's take a look at your question.

A computer appliance dealer bought a computer at a wholesale price of $500 and then sold it at a 20 percent discount off the suggested retail price. If the dealer made a 12 percent profit on the wholesale price, it implies that he sold the computer at a price of $$500+500\cdot12\%=500+500\cdot0.12=500+60=560\ \text{dollars}.$$ Now, let x the suggested price, then $$x-20\%\cdot x=80\%\cdot x=0.8\cdot x=560\ \Leftrightarrow\ x=\frac{560}{0.8}=700\ \text{dollars}.$$ Hence, the correct answer is the option [spoiler]D=$700[/spoiler].

I hope this explanation may help you.

I'm available if you'd like a follow-up.

Regards.

GMAT Prep From The Economist
We offer 70+ point score improvement money back guarantee.
Our average student improves 98 points.

Like this post

GMATGuruNY: GMAT Instructor; Posts: 15539; Joined: Tue May 25, 2010 12:04 pmFollowed by: 1906 members; Location: New York, NY; Thanked: 13060 times; GMAT Score:790

by GMATGuruNY » Wed Jan 17, 2018 8:17 am

lheiannie07 wrote:A computer appliance dealer bought a computer at a wholesale price of $500 and then sold it at a 20 percent discount off the suggested retail price. If the dealer made a 12 percent profit on the wholesale price, what was the suggested retail price of the computer?

A) $560
B) $580
C) $660
D) $700
E) $730

Profit = 12% of the $500 wholesale price = (12/100)(500) = 60.
Thus:
Selling price = (wholesale price) + (profit) = 500+60 = 560.

We can PLUG IN THE ANSWERS, which represent the retail price.
When the retail price is reduced by 20%, the result will be the $560 selling price.

Answer choice D: 700
700 - (20% of 700) = 700 - 140 = 560.
Success!

The correct answer is D.

Private tutor exclusively for the GMAT and GRE, with over 20 years of experience.
Followed here and elsewhere by over 1900 test-takers.
I have worked with students based in the US, Australia, Taiwan, China, Tajikistan, Kuwait, Saudi Arabia -- a long list of countries.
My students have been admitted to HBS, CBS, Tuck, Yale, Stern, Fuqua -- a long list of top programs.

As a tutor, I don't simply teach you how I would approach problems.
I unlock the best way for YOU to solve problems.

For more information, please email me (Mitch Hunt) at [email protected].
Student Review #1
Student Review #2
Student Review #3

Like this post

Jeff@TargetTestPrep: GMAT Instructor; Posts: 1462; Joined: Thu Apr 09, 2015 9:34 amFollowed by: 22 members; Location: New York, NY; Thanked: 39 times

by Jeff@TargetTestPrep » Mon Feb 26, 2018 10:28 am

lheiannie07 wrote:A computer appliance dealer bought a computer at a wholesale price of $500 and then sold it at a 20 percent discount off the suggested retail price. If the dealer made a 12 percent profit on the wholesale price, what was the suggested retail price of the computer?

A) $560
B) $580
C) $660
D) $700
E) $730

We can let r = the suggested retail price of the computer.

Since the dealer sold the computer at a 20% discount off the suggested retail price, the dealer sold the computer for 0.8r. Since the dealer made a 12% profit, we can create the following equation to determine r:

revenue - cost = 0.12(cost)

0.8r - 500 = 0.12(500)

0.8r - 500 = 60

0.8r = 560

r = 560/0.8 = 700

Answer:D

Jeffrey Miller
Head of GMAT Instruction
[email protected]

See why Target Test Prep is rated 5 out of 5 stars on BEAT the GMAT. Read our reviews

Like this post

Post new topic Post Reply

• Page 1 of 1

GMAT Course Reviews

559 reviews

1168 reviews

431 reviews

359 reviews

147 reviews

5/5

5 Star (560 Reviews)

"Target Test Prep is the closest to the official version of the GMAT exam, about 99% accuracy in terms of the quality and quantity of information. The course has excellently created singular sets of focused lessons and tests for every possible topic that one could come across in the official GMAT exam."

"The TTP course maximizes the efficiency of the time you spend studying. It will take time and effort but I could almost guarantee that if you complete the course exactly as it is laid out you will get an amazing score. They also have a very responsive team willing to help with any questions you might have."

"TTP has two things that I think no other test prep company offers: A teaching approach that reinforces understanding and an attitude that will give you the mental preparedness needed to succeed on the test. TTP gives you a deep understanding of the concept you need to know while teaching you how to think."

Write a Review