Jacob marks his goods up by 75%

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BTGmoderatorDC: Moderator; Posts: 7187; Joined: Thu Sep 07, 2017 4:43 pmFollowed by: 23 members

by BTGmoderatorDC » Mon Jan 01, 2018 4:16 am

Jacob marks his goods up by 75% and then offers a discount on the marked price. The profit that he makes after offering the discount is 40%. What % discount did Jacob offer?

A. 15%
B. 20%
C. 25%
D. 35%
E. 75%

Is there a strategic approach to this question?

OA B

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Source: Beat The GMAT — Problem Solving | Mon Jan 01, 2018 4:16 am

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by GMATWisdom » Mon Jan 01, 2018 7:06 am

lheiannie07 wrote:Jacob marks his goods up by 75% and then offers a discount on the marked price. The profit that he makes after offering the discount is 40%. What % discount did Jacob offer?

A. 15%
B. 20%
C. 25%
D. 35%
E. 75%

Is there a strategic approach to this question?

OA B

I think we should not think of strategic approach on simple questions. Just do it in the following way:
If 100 is the cost of the goods he will mark them as 175 and sell them at 140.
therefore discount offered would be 175-140=35 on marked price 175.
Hence percentage discount offered = 35*100/175=20
Therefore option B is correct.

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by [email protected] » Mon Jan 01, 2018 10:45 am

Hi lheiannie07,

We're told that Jacob marks his goods up by 75% and then offers a discount on the marked price - and this results in a profit of 40% (after offering the discount). We're asked for the percent discount that Jacob offered. This question can be solved by TESTing VALUES.

IF....
Original Price = $100
Markup Price = $100 + (.75)($100) = $175
'Discount' Price = $100 + (.4)($100) = $140

We're asked for the Percent Change, so we'll need the Percentage Change Formula:

(New - Old)/(Old) = ($140 - $175)/$175 = -$35/$175 = -1/5 = 20% discount.

Final Answer: B

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

Contact Rich at [email protected]

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by Scott@TargetTestPrep » Wed Aug 14, 2019 4:34 pm

BTGmoderatorDC wrote:Jacob marks his goods up by 75% and then offers a discount on the marked price. The profit that he makes after offering the discount is 40%. What % discount did Jacob offer?

A. 15%
B. 20%
C. 25%
D. 35%
E. 75%

Is there a strategic approach to this question?

OA B

We can let the cost of the goods to Jacob be 100, so the marked price is 1.75 x 100 = 175. Since he still makes 40% profit after the discount, the discounted price is 1.4 x 100 = 140.

Since 140/175 = 0.8 = 80% (that is, the discounted price is 80% of the marked price), the discount must be 20% (so that the discounted price is 80% of the marked price).

Answer: B

Scott Woodbury-Stewart
Founder and CEO
[email protected]

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