When sold at a 40% discount, a sweater nets the merchant a 20% profit on the wholesale cost at which he initially

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BTGmoderatorDC: Moderator; Posts: 7187; Joined: Thu Sep 07, 2017 4:43 pmFollowed by: 23 members

by BTGmoderatorDC » Sat Dec 24, 2022 2:42 am

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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

Source: Veritas Prep

Source: Beat The GMAT — Problem Solving | Sat Dec 24, 2022 2:42 am

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Re: When sold at a 40% discount, a sweater nets the merchant a 20% profit on the wholesale cost at which he initially

by Scott@TargetTestPrep » Wed Dec 28, 2022 5:46 pm

BTGmoderatorDC wrote: ↑
Sat Dec 24, 2022 2:42 am
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

Source: Veritas Prep

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:

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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