Hi,
The answer is C) but my calculation was
selling price 60*1.25=75
discount 0.2=15
the gross profit is zero.. (which is unlikely happen...)
Can anyone check which part is wrong?
. A merchant purchased a jacket for $60 and then determined a selling price that equalled the purchase price of the jacket plus a markup that was 25 percent of the selling price. During a sale, the merchant discounted the selling price by 20 percent and sold the jacket. What was the merchant’s gross profit on this sale?
(A) $0
(B) $3
(C) $4
(D) $12
(E) $15
ps 500 test7 #20
This topic has expert replies
- Prasanna
- Master | Next Rank: 500 Posts
- Posts: 418
- Joined: Mon Feb 26, 2007 6:41 pm
- Thanked: 24 times
Hidunkin77 wrote:Hi,
The answer is C) but my calculation was
selling price 60*1.25=75
discount 0.2=15
the gross profit is zero.. (which is unlikely happen...)
Can anyone check which part is wrong?
. A merchant purchased a jacket for $60 and then determined a selling price that equalled the purchase price of the jacket plus a markup that was 25 percent of the selling price. During a sale, the merchant discounted the selling price by 20 percent and sold the jacket. What was the merchant’s gross profit on this sale?
(A) $0
(B) $3
(C) $4
(D) $12
(E) $15
The question says 25% mark up on selling price and not the cost. Hence the selling price is $80. Discount is $16 and hence profit is $64-$60=$4.
Hence the correct option is C
-
- Legendary Member
- Posts: 559
- Joined: Tue Mar 27, 2007 1:29 am
- Thanked: 5 times
- Followed by:2 members
A merchant purchased a jacket for $60 and then determined a selling price that equalled the purchase price of the jacket plus a markup that was 25 percent of the selling price. During a sale, the merchant discounted the selling price by 20 percent and sold the jacket. What was the merchant’s gross profit on this sale?
(A) $0
(B) $3
(C) $4
(D) $12
(E) $15
Let the sale price be x. Now the markup = .25x
So selling price = $60 + .25x
.25x + 60 = x
.75x = 60
x = 60/.75 = $80
Now the discount given by the merchant = .2*80 = $16
SP after discount = $80 - 16 = $64
Thus net profit made by the merchant = $64 - $60 = $4
(A) $0
(B) $3
(C) $4
(D) $12
(E) $15
Let the sale price be x. Now the markup = .25x
So selling price = $60 + .25x
.25x + 60 = x
.75x = 60
x = 60/.75 = $80
Now the discount given by the merchant = .2*80 = $16
SP after discount = $80 - 16 = $64
Thus net profit made by the merchant = $64 - $60 = $4
-
- Legendary Member
- Posts: 941
- Joined: Sun Dec 27, 2009 12:28 am
- Thanked: 20 times
- Followed by:1 members
Nice and Simple explanation!
Thanks!
Thanks!
Cybermusings wrote:A merchant purchased a jacket for $60 and then determined a selling price that equalled the purchase price of the jacket plus a markup that was 25 percent of the selling price. During a sale, the merchant discounted the selling price by 20 percent and sold the jacket. What was the merchant�s gross profit on this sale?
(A) $0
(B) $3
(C) $4
(D) $12
(E) $15
Let the sale price be x. Now the markup = .25x
So selling price = $60 + .25x
.25x + 60 = x
.75x = 60
x = 60/.75 = $80
Now the discount given by the merchant = .2*80 = $16
SP after discount = $80 - 16 = $64
Thus net profit made by the merchant = $64 - $60 = $4
GMAT/MBA Expert
- Jeff@TargetTestPrep
- GMAT Instructor
- Posts: 1462
- Joined: Thu Apr 09, 2015 9:34 am
- Location: New York, NY
- Thanked: 39 times
- Followed by:22 members
We are given that a jacket was purchased for 60 dollars. The jacket was sold for a price that equalled the purchase price of the jacket plus a markup that was 25 percent of the selling price. We can let the selling price = p, and thus the selling price is 60 + 0.25p. We can create the following equation and solve for p:dunkin77 wrote: A merchant purchased a jacket for $60 and then determined a selling price that equalled the purchase price of the jacket plus a markup that was 25 percent of the selling price. During a sale, the merchant discounted the selling price by 20 percent and sold the jacket. What was the merchant's gross profit on this sale?
(A) $0
(B) $3
(C) $4
(D) $12
(E) $15
p = 60 + 0.25p
Multiply the equation by 4, we have:
4p = 240 + p
3p = 240
p = 80
Since the selling price was then discounted 20%, the discounted price was:
0.8(80) = 64
Thus, the profit on the sale was 64 - 60 = $4.
Answer: C
Jeffrey Miller
Head of GMAT Instruction
[email protected]
See why Target Test Prep is rated 5 out of 5 stars on BEAT the GMAT. Read our reviews