A trader marked the price of a car 20% above the cost price and allowed the purchaser 5% discount on the marked price there by gained Rs.8400. Find the cost price of the car?
A. Rs.60000
B. Rs.75000
C. Rs.68400
D. Rs.78400
E. Rs.88400
Ans: A
[PLEASE GIVE DETAIL SOLUTIONS. THANKS IN ADVANCE]
A trader marked the price of a car
This topic has expert replies
GMAT/MBA Expert
- Brent@GMATPrepNow
- GMAT Instructor
- Posts: 16207
- Joined: Mon Dec 08, 2008 6:26 pm
- Location: Vancouver, BC
- Thanked: 5254 times
- Followed by:1268 members
- GMAT Score:770
Who gained Rs.8400?emdadul28 wrote:A trader marked the price of a car 20% above the cost price and allowed the purchaser 5% discount on the marked price there by gained Rs.8400. Find the cost price of the car?
A. Rs.60000
B. Rs.75000
C. Rs.68400
D. Rs.78400
E. Rs.88400
Ans: A
[PLEASE GIVE DETAIL SOLUTIONS. THANKS IN ADVANCE]
Did the purchaser save that much money or does Rs.8400 represent the trader's profit?
NOTE: When posting questions, please use the spoiler function to hide the correct answer. This will allow others to attempt the question without seeing the final answer.
Cheers,
Brent
GMAT/MBA Expert
- Brent@GMATPrepNow
- GMAT Instructor
- Posts: 16207
- Joined: Mon Dec 08, 2008 6:26 pm
- Location: Vancouver, BC
- Thanked: 5254 times
- Followed by:1268 members
- GMAT Score:770
I'll assume that Rs.8400 represents the trader's PROFITemdadul28 wrote:A trader marked the price of a car 20% above the cost price and allowed the purchaser 5% discount on the marked price there by gained Rs.8400. Find the cost price of the car?
A. Rs.60000
B. Rs.75000
C. Rs.68400
D. Rs.78400
E. Rs.88400
So solve this, let's first determine the net result of increasing the cost price by 20% and then decreasing the result by 5%
To do this, let's assign a nice value to the COST price.
Let 100 = the COST price
So, after a 20% increase, the NEW price = 120
Now let's decrease this NEW price by 5%
5% of 120 = 6, so the FINAL price = 120 - 6 = 114
If the COST price = 100, and the FINAL price is 114, then the trader makes a 14% PROFIT.
In other words, the trader's PROFIT = 14% of the COST PRICE
We're told that the PROFIT = Rs.8400
So, we know that Rs.8400 = 14% of the COST PRICE
In other words, 8400 = 0.14(COST PRICE)
So, COST PRICE = 8400/0.14 = 60,000
Answer: A
Cheers,
Brent
GMAT/MBA Expert
- [email protected]
- Elite Legendary Member
- Posts: 10392
- Joined: Sun Jun 23, 2013 6:38 pm
- Location: Palo Alto, CA
- Thanked: 2867 times
- Followed by:511 members
- GMAT Score:800
Hi emdadul28,
This question can be solved by TESTing THE ANSWERS.
Let's TEST Answer A: 60,000
IF... the 'cost price' = 60,000
then the 'marked price' = (60,000)(1.2) = 72,000
and the 5% discount price = (72,000) - (72,000)(.05) = 72,000 - 3,600 = 68,400
so the overall seller's profit would be... 68,400 - 60,000 = 8,400
This is an exact match for what we were told, so this MUST be the answer.
Final Answer: A
GMAT assassins aren't born, they're made,
Rich
This question can be solved by TESTing THE ANSWERS.
Let's TEST Answer A: 60,000
IF... the 'cost price' = 60,000
then the 'marked price' = (60,000)(1.2) = 72,000
and the 5% discount price = (72,000) - (72,000)(.05) = 72,000 - 3,600 = 68,400
so the overall seller's profit would be... 68,400 - 60,000 = 8,400
This is an exact match for what we were told, so this MUST be the answer.
Final Answer: A
GMAT assassins aren't born, they're made,
Rich
GMAT/MBA Expert
- Jeff@TargetTestPrep
- GMAT Instructor
- Posts: 1462
- Joined: Thu Apr 09, 2015 9:34 am
- Location: New York, NY
- Thanked: 39 times
- Followed by:22 members
We can let the cost of the car = c.emdadul28 wrote:A trader marked the price of a car 20% above the cost price and allowed the purchaser 5% discount on the marked price there by gained Rs.8400. Find the cost price of the car?
A. Rs.60000
B. Rs.75000
C. Rs.68400
D. Rs.78400
E. Rs.88400
Since the trader marked the car up 20% and then down 5%, the car was sold for:
1.2 x 0.95 x c = 1.14c
Since the profit was Rs. 8400, we can create the following equation:
8400 = 1.14c - c
8400 = 0.14c
60,000 = c
Answer: A
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
-
- GMAT Instructor
- Posts: 2630
- Joined: Wed Sep 12, 2012 3:32 pm
- Location: East Bay all the way
- Thanked: 625 times
- Followed by:119 members
- GMAT Score:780
Cost = x
Marked = x + .2x = 1.2x
Discount = 1.2x - .05*1.2x = 1.14x
.14x = 8400
x = 60000
Marked = x + .2x = 1.2x
Discount = 1.2x - .05*1.2x = 1.14x
.14x = 8400
x = 60000
-
- GMAT Instructor
- Posts: 2630
- Joined: Wed Sep 12, 2012 3:32 pm
- Location: East Bay all the way
- Thanked: 625 times
- Followed by:119 members
- GMAT Score:780
It occurs to me that might be easier to see if I color coded it!
Cost = x
Marked = x + .2x = 1.2x
Discount = 1.2x - .05*1.2x = 1.14x
The cost was x and the final sale price is 1.14x, so the dealer nets .14x.
.14x = 8400
x = 60000
Cost = x
Marked = x + .2x = 1.2x
Discount = 1.2x - .05*1.2x = 1.14x
The cost was x and the final sale price is 1.14x, so the dealer nets .14x.
.14x = 8400
x = 60000
GMAT/MBA Expert
- Jay@ManhattanReview
- GMAT Instructor
- Posts: 3008
- Joined: Mon Aug 22, 2016 6:19 am
- Location: Grand Central / New York
- Thanked: 470 times
- Followed by:34 members
Say the cost price = $100, thus the marked price = 100 + 20 = $120.emdadul28 wrote:A trader marked the price of a car 20% above the cost price and allowed the purchaser 5% discount on the marked price there by gained Rs.8400. Find the cost price of the car?
A. Rs.60000
B. Rs.75000
C. Rs.68400
D. Rs.78400
E. Rs.88400
Ans: A
[PLEASE GIVE DETAIL SOLUTIONS. THANKS IN ADVANCE]
Thus, the discounted price = 120 - 5% of 120 = 120 - 6 = 114.
The gain = 114 - 100 = 14
Now $14 gain corresponds to the actual gain $8400. Thus 8400/14 = 600 is a factor that must be multiplied to cost price (100) to get the actual price.
Or, the cost price = 100*600 = [spoiler]$60,000[/spoiler].
Do not do the following in the step shown in blue.
Thus, the discounted price = 120 - 5 = 115.
This would the CP as 100*(8400/15)= $56,000.
However, there is no option as $56,000. So one may be safe if he/she commits this mistake.
The discount of 5% is applicable on marked price ($120) and not on Cost price ($100).
The correct answer: A
Hope this helps!
Download free ebook: Manhattan Review GMAT Quantitative Question Bank Guide
-Jay
_________________
Manhattan Review GMAT Prep
Locations: New York | Hyderabad | Mexico City | Toronto | and many more...
Schedule your free consultation with an experienced GMAT Prep Advisor! Click here.