Hi RiyaR,

This question is essentially just a "math" question. How you set up the math (and work through the steps) is up to you though (you can use fractions, decimals or percents):

Purchase price = $60
Selling price = $60 + 25% of the Final Price
Final Price = X

$60 + .25X = X
$60 = .75X
$60 = (3/4)(X)

Now, multiply both sides by 4/3
$60(4/3) = (4/3)(3/4)X
$240/3 = (12/12)X
$80 = X

During the sale, the selling price was discounted by 20%

$80 - 20%($80) = Final Selling Price
$80 - 1/5($80) =
$80 - $16 =
$64

The Gross Profit = Final Price - Purchase Price
$64 - $60 = $4

Final Answer: C

GMAT assassins aren't born, they're made,
Rich