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If the profit on a product is 20 percent of its sales price,

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by Max@Math Revolution » Mon Apr 30, 2018 12:27 am

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[GMAT math practice question]

If the profit on a product is 20 percent of its sales price, what percent is the profit of the cost price?

A. 20%
B. 25%
C. 30%
D. 33+(1/3)%
E. 35%
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by GMATGuruNY » Mon Apr 30, 2018 2:33 am
Max@Math Revolution wrote:[GMAT math practice question]

If the profit on a product is 20 percent of its sales price, what percent is the profit of the cost price?

A. 20%
B. 25%
C. 30%
D. 33+(1/3)%
E. 35%
Let the sale price = 100, implying that the profit = 0.2(100) = 20 and that the cost price = (sale price) - (profit) = 100-20 = 80.
What percent of the cost price is the profit?
profit/cost = 20/80 = 1/4 = 25%.

The correct answer is B.
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by swerve » Mon Apr 30, 2018 9:49 am
We can say,

SP = 100
Profit = 20

CP = 80

Profit / CP = 20/80 = 1/4 = 25%. Option B.

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by Brent@GMATPrepNow » Mon Apr 30, 2018 10:12 am
Max@Math Revolution wrote: If the profit on a product is 20 percent of its sales price, what percent is the profit of the cost price?

A. 20%
B. 25%
C. 30%
D. 33+(1/3)%
E. 35%
Choosing numbers that satisfy the given conditions (as others above have done) is the best/fastest approach.
Here's a (longer) algebraic approach.

Let SALE price = x
So, PROFIT = 20% of x = 0.2x

COST PRICE = SALE PRICE - PROFIT
= x - 0.2x
= 0.8x

What percent is the profit of the cost price?
In other words, 0.2x/0.8x = what %?
0.2x/0.8x = 0.2/0.8
= 2/8
= 1/4
= 25%

Answer: B

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by Jeff@TargetTestPrep » Tue May 01, 2018 9:28 am
Max@Math Revolution wrote:
If the profit on a product is 20 percent of its sales price, what percent is the profit of the cost price?

A. 20%
B. 25%
C. 30%
D. 33+(1/3)%
E. 35%
We can let r = sales price and c = cost price and p = the profit. Recall that p = r - c. So we have:

0.2r = r - c

c = r - 0.2r

c = 0.8r

Thus, the profit is p/c = 0.2r/(0.8r) = 1/4 = 25% of the cost price.

Answer: B

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by Max@Math Revolution » Wed May 02, 2018 1:53 am
=>

Let P, R and C be the profit, the sales price (revenue) and the cost price of the product, respectively.
Then P = R - C.
Since P is 20 percent of the sales price, the IVY method tells us that P = 20*(1/100)*R.
So, P = (1/5)R or R = 5P.
Plugging this into P = R - C yields P = 5P - C or C = 4P.
It follows that P = (1/4)C, and P is 25 percent of C.

Therefore, B is the answer.
Answer B
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by Jeff@TargetTestPrep » Thu May 03, 2018 3:28 pm
Max@Math Revolution wrote:[GMAT math practice question]

If the profit on a product is 20 percent of its sales price, what percent is the profit of the cost price?

A. 20%
B. 25%
C. 30%
D. 33+(1/3)%
E. 35%
We can let r = sales price and c = cost price and p = the profit. Recall that p = r - c. So we have:

0.2r = r - c

c = r - 0.2r

c = 0.8r

Thus, the profit is p/c = 0.2r/(0.8r) = 1/4 = 25% of the cost price.

Answer: B

Jeffrey Miller
Head of GMAT Instruction
[email protected]

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