Whenever Bianca travels to Italy, she brings back Gucci bags to sell to her friends. The bags she buys in Italy are

[BTGmoderatorDC]

Whenever Bianca travels to Italy, she brings back Gucci bags to sell to her friends. The bags she buys in Italy are purchased at a 60 percent discount off American prices. She sells the bags to her friends at a price 25 percent higher than what she paid for them. After one trip, she sells bags to her friends that would have cost $4,000 in American stores. What is Bianca’s profit per bag?

(A) $400
(B) $600
(C) $1,600
(D) $2,200
(E) $2,400


OA A

Source: Veritas Prep

[Scott@TargetTestPrep]

Whenever Bianca travels to Italy, she brings back Gucci bags to sell to her friends. The bags she buys in Italy are purchased at a 60 percent discount off American prices. She sells the bags to her friends at a price 25 percent higher than what she paid for them. After one trip, she sells bags to her friends that would have cost $4,000 in American stores. What is Bianca’s profit per bag?

(A) $400
(B) $600
(C) $1,600
(D) $2,200
(E) $2,400


OA A

Source: Veritas Prep

Solution:

Note: We must assume that the question is asking about a single bag.

Since Bianca sold a bag that would have cost $4,000 in American stores, she actually paid 0.4 x 4,000 = $1,600 for the bag. She then sold the bag for 1.25 x 1600 = $2,000. Thus, she made a profit of $400.

Answer: A