A merchant purchased a jacket for $60 and then determined

Sarang · **Posted:** Sat Nov 06, 2010 2:32 pm


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	GMAT Timer...

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

C

Bunuel · **Posted:** Sat Nov 06, 2010 9:34 pm

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.

nov79 · **Posted:** Sat Nov 06, 2010 2:38 pm

60*1.25=75
75*0.8=60
60-60=0
the answer is A

rvinodhini · **Posted:** Sun Dec 11, 2011 9:29 pm

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

I am getting the answer as A.but the OA is different.
Can someone help ?

bhavinp · **Posted:** Sun Dec 11, 2011 9:50 pm

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!

sandeeepsharma · **Posted:** Sun Dec 11, 2011 10:38 pm

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 $

TomB · **Posted:** Mon Dec 12, 2011 9:41 am

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

gmihir · **Posted:** Sun May 06, 2012 8:57 pm

A man purchased a jacket for $60. He determined sale price by adding the jacket's cost and 25 percent of Sale Price as a markup. During the sale, however, he provided 20 percent discount on the Sale Price. What was the gross profit of this transaction ?

A) $0
B) $3
C) $4
D) $12
E) $15

Bunuel · **Posted:** Sun May 06, 2012 10:40 pm

gmihir wrote:

A man purchased a jacket for $60. He determined sale price by adding the jacket's cost and 25 percent of Sale Price as a markup. During the sale, however, he provided 20 percent discount on the Sale Price. What was the gross profit of this transaction ?

A) $0
B) $3
C) $4
D) $12
E) $15

Merging similar topics. Please ask if anything remains unclear.

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A merchant purchased a jacket for $60 and then determined

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