Find all School-related info fast with the new School-Specific MBA Forum

 It is currently 31 Aug 2016, 19:02

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# Events & Promotions

###### Events & Promotions in June
Open Detailed Calendar

### Show Tags

06 Nov 2010, 14:32
2
KUDOS
3
This post was
BOOKMARKED
00:00

Difficulty:

55% (hard)

Question Stats:

59% (02:17) correct 41% (01:01) wrong based on 279 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, 14:55, 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, 14:38
1
KUDOS
60*1.25=75
75*0.8=60
60-60=0
Math Expert
Joined: 02 Sep 2009
Posts: 34527
Followers: 6313

Kudos [?]: 80118 [10] , given: 10027

Re: Profit from a Jacket [#permalink]

### Show Tags

06 Nov 2010, 21:34
10
KUDOS
Expert's post
1
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 = $$64 - 60 = 4$$.

_________________
Magoosh Co-Founder
Joined: 17 Sep 2011
Posts: 40
Schools: UC Berkeley (Haas) - Class of 2010
Followers: 27

Kudos [?]: 29 [4] , given: 12

### Show Tags

11 Dec 2011, 21:50
4
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

### Show Tags

19 Aug 2013, 02:00
Bumping for review and further discussion.
_________________
SVP
Status: The Best Or Nothing
Joined: 27 Dec 2012
Posts: 1858
Location: India
Concentration: General Management, Technology
WE: Information Technology (Computer Software)
Followers: 38

Kudos [?]: 1666 [1] , given: 193

### Show Tags

19 Feb 2015, 03:41
Hello from the GMAT Club BumpBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
_________________
Manager
Joined: 14 Sep 2014
Posts: 94
WE: Engineering (Consulting)
Followers: 1

Kudos [?]: 27 [0], given: 51

Re: A merchant purchased a jacket for $60 and then determined [#permalink] ### Show Tags 18 Jul 2015, 01:39 SP = 60 + 0.25SP SP = 80 20% discount Discounted SP = 80 * 0.8 = 64 Profit = 4 Re: A merchant purchased a jacket for$60 and then determined   [#permalink] 18 Jul 2015, 01:39
Similar topics Replies Last post
Similar
Topics:
17 An electronics store purchased a CD player at a wholesale price of 60$18 09 Apr 2016, 03:55 6 A merchant paid$300 for a shipment of x identical 8 21 Apr 2012, 21:18