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A computer appliance dealer bought a computer

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A computer appliance dealer bought a computer

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
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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
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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.
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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.
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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

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