AAPL wrote:e-GMAT
A store purchased an article at a wholesale price of $75 and sold it at two successive discounts of 20% and 16.67% respectively, making a profit of 33.3% on the whole price of the article. The store sold another similar article at the same price, making a loss of 33.3% on the whole price. If the second article has a mark-up of 200% over its retail selling price, find by what percentage the mark-up price of 2nd article is more than that of 1st article?
A. 50
B. 75
C. 100
D. 125
E. 200
OA E.
We can let x = the markup price of the 1st article and create the equation (notice that 20% = 1/5, 16.67% = 1/6 and 33.3% = 1/3):
x(1 - 1/5)(1 - 1/6) = 75(1 + 1/3)
x(4/5)(5/6) = 75(4/3)
x(2/3) = 75(4/3)
Multiplying both sides by 3/2, we have:
x = 150
So the markup price of the 1st article is $150. However, its selling price (the price for which it actually sold) is 150(2/3) = $100. Therefore, the 2nd article is also sold for $100. If we let y = the wholesale price of the 2nd article, we have:
100 = y(1 - 1/3)
100 = y(2/3)
150 = y
Now letting z = the markup price of the 2nd article, we have:
z = 150(1 + 2)
z = 150(3)
z = 450
Therefore, the markup price of the 2nd article is $450, which is
(450 - 150)/150 x 100 = 300/150 x 100 = 2 x 100 = 200 percent more than that of the 1st article.
Answer: E
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