Selling price

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alex.gellatly: Master | Next Rank: 500 Posts; Posts: 435; Joined: Wed Nov 16, 2011 7:27 amFollowed by: 16 members; Thanked: 48 times

by alex.gellatly » Thu Jun 28, 2012 9:31 pm

A store's selling price of $2,240 for a certain computer would yield a profit of 40 percent of the store's cost for the computer. What selling price would yield a profit of 50 percent of the computer's cost?

A. $2,400
B. $2,464
C. $2,650
D. $2,732
E. $2.800

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Source: Beat The GMAT — Problem Solving | Thu Jun 28, 2012 9:31 pm

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by Anurag@Gurome » Thu Jun 28, 2012 9:36 pm

alex.gellatly wrote:A store's selling price of $2,240 for a certain computer would yield a profit of 40 percent of the store's cost for the computer. What selling price would yield a profit of 50 percent of the computer's cost?

Say, cost of the computer = $C
Hence, (C + 40% of C) = 2,240 --> 1.4C = 2240 --> C = 2240/1.4

Now, for 50% profit, selling price should be (C + 50% of C) = 1.5C = 1.5*2240/1.4 = 15*2240/14 = 15*160 = 2400

The correct answer is A.

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tutorphd: Master | Next Rank: 500 Posts; Posts: 126; Joined: Sun Jun 24, 2012 10:11 amFollowed by: 7 members; Location: Chicago, IL; Thanked: 36 times

by tutorphd » Thu Jun 28, 2012 9:38 pm

Store cost = x
If the profit is 40% then the selling price 2240 = 1.40 x

Whe need to know selling price that is y = 1.50x

Divide the two equations to cancel x that we don't need: y/2240 = 1.50/1.40

y = $2400

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GMATGuruNY: GMAT Instructor; Posts: 15539; Joined: Tue May 25, 2010 12:04 pmFollowed by: 1906 members; Location: New York, NY; Thanked: 13060 times; GMAT Score:790

by GMATGuruNY » Fri Jun 29, 2012 3:46 am

alex.gellatly wrote:A store's selling price of $2,240 for a certain computer would yield a profit of 40 percent of the store's cost for the computer. What selling price would yield a profit of 50 percent of the computer's cost?

A. $2,400
B. $2,464
C. $2,650
D. $2,732
E. $2.800

Thanks

ALWAYS LOOK AT THE ANSWER CHOICES.

To increase the profit by 10%, 10% of the COST must be added to the selling price.
Increasing the SELLING PRICE by 10% = 2240 + 224 = 2464.
Since the cost is LESS than the selling price, adding 10% of the COST to the selling price must yield a value LESS than 2464.

The correct answer is A.

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