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A merchant purchased a jacket for $60 and then determined [#permalink] ### Show Tags 06 Nov 2010, 13:32 2 This post received KUDOS 6 This post was BOOKMARKED 00:00 Difficulty: 55% (hard) Question Stats: 59% (02:16) correct 41% (00:59) wrong based on 342 sessions ### HideShow timer Statistics 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 [Reveal] Spoiler: OA Last edited by Bunuel on 05 Feb 2012, 13:55, edited 1 time in total. Edited the question and added the OA Manager Joined: 03 Sep 2010 Posts: 75 Location: Israel GMAT 1: 660 Q47 V34 GMAT 2: 670 Q48 V34 GPA: 3.2 WE: Operations (Non-Profit and Government) Followers: 3 Kudos [?]: 32 [1] , given: 2 Re: Profit from a Jacket [#permalink] ### Show Tags 06 Nov 2010, 13:38 1 This post received KUDOS 60*1.25=75 75*0.8=60 60-60=0 the answer is A Math Expert Joined: 02 Sep 2009 Posts: 36590 Followers: 7092 Kudos [?]: 93352 [10] , given: 10557 Re: Profit from a Jacket [#permalink] ### Show Tags 06 Nov 2010, 20:34 10 This post received KUDOS Expert's post 2 This post was BOOKMARKED Sarang 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 No, answer A is not correct. Note that we are told that: "markup ... was 25 percent of the selling price". Step by step: Let the markup be $$x$$, so $$x$$ must be 25% of the selling price $$60+x$$: $$x=0.25(60+x)$$ --> $$x=20$$ --> selling price will be $$60+20=80$$. The price after discount of 20% will be $$80*0.8=64$$ --> gross profit on the sale will be final selling price - cost of the jacket = $$64 - 60 = 4$$. Answer: C. _________________ Intern Joined: 03 Dec 2010 Posts: 44 Followers: 1 Kudos [?]: 31 [0], given: 7 A merchant purchased a jacket for$60 and then determined a selling pr [#permalink]

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02 Apr 2011, 05:45
A merchant purchased a jacket for $60 and then determined a selling price that equaled 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: A merchant purchased a jacket for $60 and then determined a selling pr [#permalink] ### Show Tags 02 Apr 2011, 06:40 Markup = x x = 0.25(60 + x) => 3x/4 = 15 => x = 20 So SP = 80 But Actual SP = 0.8 * 80 = 64 So profit =$4

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Re: A merchant purchased a jacket for $60 and then determined a selling pr [#permalink] ### Show Tags 02 Apr 2011, 06:45 Acer86 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 Selling price is sp, so $$sp=60+0.25*sp$$, where $$m*0.25$$ is a markup sp=80 Discounted the sp by 20% means $$sp-0.2sp=0.8sp$$ $$0.8sp=0.8*80=64$$ Gross profit = 64-purchase price = 64-60=4 (C) Veritas Prep GMAT Instructor Joined: 16 Oct 2010 Posts: 7125 Location: Pune, India Followers: 2137 Kudos [?]: 13679 [0], given: 222 Re: A merchant purchased a jacket for$60 and then determined a selling pr [#permalink]

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02 Apr 2011, 07:00
Acer86 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

First of all, the question has very ambiguous language. They have to distinguish between marked price and selling price and they fail to do that. This is what the question needs to change:

A merchant purchased a jacket for $60 and then determined a mark-up price that equaled the purchase price of the jacket plus a markup that was 25 percent of the mark-up price. During a sale, the merchant discounted the mark-up price by 20 percent and sold the jacket. What was the merchant’s gross profit on this sale? Here, mark up was 25% of mark-up price so purchase price was 75% of mark-up price i.e. purchase price was increased by 33.33% to get mark up price (25 is 33.33% of 75) $$(1 + Mark Up%) * (1 - Discount%)= (1 + Profit%)$$ $$(1 + \frac{1}{3})*(1- \frac{1}{5}) = (1 + Profit%)$$ $$Profit% = \frac{1}{15}$$ Hence you get a profit of$1 for every $15 of purchase price. Since purchase price is 4*15, profit will be 4. For more on the formula and concept of Mark up, discount, check: http://www.veritasprep.com/blog/2011/02 ... nt-profit/ _________________ Karishma Veritas Prep | GMAT Instructor My Blog Get started with Veritas Prep GMAT On Demand for$199

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Re: A merchant purchased a jacket for $60 and then determined a selling pr [#permalink] ### Show Tags 02 Apr 2011, 11:14 Actual Cost =$60
SP = Actual Cost + Mark up

= Actual Cost + 25% SP

= 60*100/75

on sale SP = 80/100(60*75/100) = 64

Gross profit = $4 Answer is C Magoosh Co-Founder Joined: 17 Sep 2011 Posts: 41 Schools: UC Berkeley (Haas) - Class of 2010 Followers: 25 Kudos [?]: 29 [4] , given: 12 Re: percentages [#permalink] ### Show Tags 11 Dec 2011, 20:50 4 This post received KUDOS Expert's post This is a bit tricky, it's all in the details. I suspect you read the question like this: Merchant purchases jacket for$60
Merchant prices jacket at 25% more than purchase price. 20% more than $60 =$75
Merchant sells jacket at %20 off. 20% off of $75 =$60
Merchant makes $0 because he bought and sold at$60

But the question actually reads like this:
Merchant purchases jacket for $60 Merchant prices jacket at purchase price + 25% of selling price. Note the difference. Let's break this down. Selling price = purchase price + 25% of selling price 75% of Selling price = purchase price Selling price =$60/75% = $80 Now we can finish the question... Merchant sells jacket at %20 off. 20% off of$80 = $64 Merchant makes$4 because he bought at $60 and sold at$64.

I hope that helps!
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11 Dec 2011, 21:38
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OA is C
purchase price + 25% selling price= 100% selling price
60+ 25% SP= 100% SP
60= 75% SP

s0 100 % SP =80

now 20 % sale means 20 % of 80 = 16
so he sold the jacket at 80-16 = 64 $total profit = 64-60 = 4$
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12 Dec 2011, 08:41
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Let the cost price is C,selling price is S.
C=60.
S=C+0.25(S)
0.75(S)=C
3/4(S)=60
S=60*4/3=80.
seller gave a discount of 20% on selling price which is 80. 80*1/5=16(discount price)
Selling price -Discount price=80-16=64 (selling price after discount)
Gross profit= selling price after discount- cost price.=64-60=4
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25 Nov 2013, 22:03
1
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Let selling price = x
So, x = 60 + 25x/100
Calculating above, x = 80
Selling price = 80

20% Discount on Selling price = 64
So, profit = 64-60 = 4 Answer = C
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18 Jul 2015, 00:39
SP = 60 + 0.25SP

SP = 80
20% discount
Discounted SP = 80 * 0.8 = 64

Profit = 4
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06 Dec 2016, 19:09
PP = purchasing price
SP = selling price

PP=$60 SP=PP+0.25SP --> 0.75SP=0.60 -->SP=$80

20% off SP = 0.80(80) = $64 (price customer paid) 64-60 =$4 profit

C.
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# A merchant purchased a jacket for \$60 and then determined

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