Veritas Prep
When sold at a 40% discount, a sweater nets the merchant a 20% profit on the wholesale cost at which he initially purchased the item. By what % is the sweater marked up from wholesale at its normal retail price?
A. 20%
B. 40%
C. 50%
D. 80%
E. 100%
OA E
When sold at a 40% discount, a sweater nets the merchant a
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Let's work BACKWARDS.AAPL wrote:Veritas Prep
When sold at a 40% discount, a sweater nets the merchant a 20% profit on the wholesale cost at which he initially purchased the item. By what % is the sweater marked up from wholesale at its normal retail price?
A. 20%
B. 40%
C. 50%
D. 80%
E. 100%
OA E
Let's say the WHOLESALE price was $100
the merchant made a net profit of 20% on the wholesale cost (which was $100)
So, the merchant sold the sweater for $120
[the sweater] sold at a 40% discount
Let M = the markup price on the label (before any discounts).
So, 40% less than M = $120
In other words, 60% of M = $120
Or we can write 0.6M = 120
So, M = 200
In other words, the markup price (before any discounts) was $200
If the wholesale price was $100, and the markup price was $200, then the sweater was originally marked up by 100%
Answer: E
Cheers,
Brent
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- Jay@ManhattanReview
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Say the cost price = $x and the markup price = $y.AAPL wrote:Veritas Prep
When sold at a 40% discount, a sweater nets the merchant a 20% profit on the wholesale cost at which he initially purchased the item. By what % is the sweater marked up from wholesale at its normal retail price?
A. 20%
B. 40%
C. 50%
D. 80%
E. 100%
OA E
After the discount of 40%, the selling price = (1 - 40%) of y = 0.6y
Profit = 20% of x = 0.2x
Thus, Selling price - Cost price = Profit
0.6y - x = 0.2x
y = 2x
y = 200% of x
The sweater is marked up by 100% from wholesale at its normal retail price.
The correct answer: E
Hope this helps!
-Jay
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We can let the discount price of the sweater be $60. So the normal retail price is $100. Now we can let n = the wholesale cost, we have:AAPL wrote:Veritas Prep
When sold at a 40% discount, a sweater nets the merchant a 20% profit on the wholesale cost at which he initially purchased the item. By what % is the sweater marked up from wholesale at its normal retail price?
A. 20%
B. 40%
C. 50%
D. 80%
E. 100%
OA E
1.2n = 60
n = 60/1.2 = 50
So the wholesale cost is $50 and the sweater must have been marked up by $50 or 100% of its wholesale cost to get to its normal retail price of $100.
Answer: E
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