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ps 500 test7 #20

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ps 500 test7 #20

by dunkin77 » Fri Apr 06, 2007 1:28 pm
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...) :cry:

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
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Re: ps 500 test7 #20

by Prasanna » Fri Apr 06, 2007 2:21 pm
dunkin77 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...) :cry:

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
Hi

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
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by Cybermusings » Fri Apr 06, 2007 11:25 pm
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
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by bhumika.k.shah » Sat Jan 30, 2010 7:46 pm
Nice and Simple explanation!

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
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by Jeff@TargetTestPrep » Thu Dec 14, 2017 10:38 am
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
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:

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]

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