A bookseller sells his books at a 20% markup in price...

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swerve: Legendary Member; Posts: 2499; Joined: Sun Oct 29, 2017 2:04 pm; Followed by:6 members

A bookseller sells his books at a 20% markup in price...

by swerve » Tue Nov 28, 2017 7:17 am

A bookseller sells his books at a 20% markup in price. If he sells a book for $12.00, how much he did pay for it?

A. $14.40
B. $14.00
C. $10.00
D. $9.60
E. $5.00

The OA is C.

Please, can any expert explain this PS question for me? I have many difficulties to understand why that is the correct answer. Thanks.

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Source: Beat The GMAT — Problem Solving | Tue Nov 28, 2017 7:17 am

EconomistGMATTutor: GMAT Instructor; Posts: 555; Joined: Wed Oct 04, 2017 4:18 pm; Thanked: 180 times; Followed by:12 members

by EconomistGMATTutor » Tue Nov 28, 2017 8:47 am

Hello swerve.

Let's see your question.

The bookseller add the 20% to the price he paid for the book.

So, if x is the cost price then $$120\%\cdot x\ =\ 12\ dollars,$$ it implies that $$120\%\cdot x=\frac{120}{100}\cdot x=\frac{6}{5}\cdot x=12\ dollars\ \leftrightarrow\ x=\frac{60}{6}=10\ dollars.$$ So, the correct answer is C.

I hope this may help you to understand the question.

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.

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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

by Brent@GMATPrepNow » Tue Nov 28, 2017 9:30 am

swerve wrote:A bookseller sells his books at a 20% markup in price. If he sells a book for $12.00, how much he did pay for it?

A. $14.40
B. $14.00
C. $10.00
D. $9.60
E. $5.00

Another approach is to test the answer choices

When testing the answer choices, it's a good idea to start with the MIDDLE answer choice.
If it turns out that value is too high, then you can test smaller values.
If it turns out that value is too small, then you can test bigger values.

Test C: The bookseller paid $10.00
20% of $10.00 = $2.00
$10.00 + $2.00 = $12.00
BINGO!

Answer: C

Cheers,
Brent

Brent Hanneson - Creator of GMATPrepNow.com

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GMAT/MBA Expert

Scott@TargetTestPrep: GMAT Instructor; Posts: 8085; Joined: Sat Apr 25, 2015 10:56 am; Location: Los Angeles, CA; Thanked: 43 times; Followed by:29 members

by Scott@TargetTestPrep » Sat Oct 05, 2019 3:40 pm

swerve wrote:A bookseller sells his books at a 20% markup in price. If he sells a book for $12.00, how much he did pay for it?

A. $14.40
B. $14.00
C. $10.00
D. $9.60
E. $5.00

The OA is C.

Please, can any expert explain this PS question for me? I have many difficulties to understand why that is the correct answer. Thanks.