sukhman wrote:A trader marks his good at a certain percentage over his cost price and then gives 30% discount, thereby making 5% profit. What is the markup percentage ?
40
50
60
70
80
I've added answer choices, which the GMAT would provide.
Let the cost price = 100.
We can plug in the answer choices, which represent the required markup.
Answer choice C: 60
Regular selling price = cost price + markup = 100 + .6(100) = 160.
Price with a 30% discount = 160 - .3(160) = 112.
Resulting profit = (discounted price) - (cost price) = 112-100 = 12.
Profit percentage = profit/cost = 12/100 = 12%.
Too much profit.
To decrease the profit, the markup must be LOWER.
Eliminate C, D and E.
Answer choice B: 50
Regular selling price = cost price + markup = 100 + .5(100) = 150.
Price with a 30% discount = 150 - .3(150) = 105.
Resulting profit = (discounted price) - (cost price) = 105-100 = 5.
Profit percentage = profit/cost = 5/100 = 5%.
Success!
The correct answer is
B.
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