• NEW! FREE Beat The GMAT Quizzes
    NEW! FREE Beat The GMAT Quizzes
    NEW! FREE Beat The GMAT Quizzes
    Hundreds of Questions Highly Detailed Reporting Expert Explanations TAKE A FREE GMAT QUIZ
  • 7 CATs FREE!
    If you earn 100 Forum Points

    Engage in the Beat The GMAT forums to earn
    100 points for $49 worth of Veritas practice GMATs FREE

    Veritas Prep
    VERITAS PRACTICE GMAT EXAMS
    Earn 10 Points Per Post
    Earn 10 Points Per Thanks
    Earn 10 Points Per Upvote
    REDEEM NOW

A computer appliance dealer bought a computer

This topic has 3 expert replies and 1 member reply

A computer appliance dealer bought a computer

Post
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

  • +1 Upvote Post
  • Quote
  • Flag

GMAT/MBA Expert

Top Reply
Post
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
jeff@targettestprep.com



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

  • +1 Upvote Post
  • Quote
  • Flag

GMAT/MBA Expert

Top Reply
Post
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.

_________________
Mitch Hunt
Private Tutor for the GMAT and GRE
GMATGuruNY@gmail.com

If you find one of my posts helpful, please take a moment to click on the "UPVOTE" icon.

Available for tutoring in NYC and long-distance.
For more information, please email me at GMATGuruNY@gmail.com.
Student Review #1
Student Review #2
Student Review #3

  • +1 Upvote Post
  • Quote
  • Flag
Free GMAT Practice Test How can you improve your test score if you don't know your baseline score? Take a free online practice exam. Get started on achieving your dream score today! Sign up now.
Senior | Next Rank: 100 Posts Default Avatar
Joined
15 Jan 2018
Posted:
83 messages
Post
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

  • +1 Upvote Post
  • Quote
  • Flag

GMAT/MBA Expert

Post
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 D=$700.

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.

  • +1 Upvote Post
  • Quote
  • Flag
Free 7-Day Test Prep with Economist GMAT Tutor - Receive free access to the top-rated GMAT prep course including a 1-on-1 strategy session, 2 full-length tests, and 5 ask-a-tutor messages. Get started now.
  • Magoosh
    Magoosh
    Study with Magoosh GMAT prep

    Available with Beat the GMAT members only code

    MORE DETAILS
    Magoosh
  • EMPOWERgmat Slider
    1 Hour Free
    BEAT THE GMAT EXCLUSIVE

    Available with Beat the GMAT members only code

    MORE DETAILS
    EMPOWERgmat Slider
  • Kaplan Test Prep
    Free Practice Test & Review
    How would you score if you took the GMAT

    Available with Beat the GMAT members only code

    MORE DETAILS
    Kaplan Test Prep
  • Economist Test Prep
    Free Trial & Practice Exam
    BEAT THE GMAT EXCLUSIVE

    Available with Beat the GMAT members only code

    MORE DETAILS
    Economist Test Prep
  • PrepScholar GMAT
    5 Day FREE Trial
    Study Smarter, Not Harder

    Available with Beat the GMAT members only code

    MORE DETAILS
    PrepScholar GMAT
  • Varsity Tutors
    Award-winning private GMAT tutoring
    Register now and save up to $200

    Available with Beat the GMAT members only code

    MORE DETAILS
    Varsity Tutors
  • The Princeton Review
    FREE GMAT Exam
    Know how you'd score today for $0

    Available with Beat the GMAT members only code

    MORE DETAILS
    The Princeton Review
  • e-gmat Exclusive Offer
    Get 300+ Practice Questions
    25 Video lessons and 6 Webinars for FREE

    Available with Beat the GMAT members only code

    MORE DETAILS
    e-gmat Exclusive Offer
  • Veritas Prep
    Free Veritas GMAT Class
    Experience Lesson 1 Live Free

    Available with Beat the GMAT members only code

    MORE DETAILS
    Veritas Prep
  • Target Test Prep
    5-Day Free Trial
    5-day free, full-access trial TTP Quant

    Available with Beat the GMAT members only code

    MORE DETAILS
    Target Test Prep

Top First Responders*

1 Ian Stewart 41 first replies
2 Brent@GMATPrepNow 36 first replies
3 Scott@TargetTestPrep 33 first replies
4 Jay@ManhattanReview 30 first replies
5 GMATGuruNY 23 first replies
* Only counts replies to topics started in last 30 days
See More Top Beat The GMAT Members

Most Active Experts

1 image description Scott@TargetTestPrep

Target Test Prep

159 posts
2 image description Max@Math Revolution

Math Revolution

91 posts
3 image description Brent@GMATPrepNow

GMAT Prep Now Teacher

56 posts
4 image description Ian Stewart

GMATiX Teacher

50 posts
5 image description GMATGuruNY

The Princeton Review Teacher

35 posts
See More Top Beat The GMAT Experts