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A merchant purchased a jacket for $60 and then determined  Question banks Downloads My Bookmarks Reviews Important topics Author Message TAGS: Manager Joined: 01 Nov 2010 Posts: 181 Location: Zürich, Switzerland Followers: 2 Kudos [?]: 27 [2] , given: 20 A merchant purchased a jacket for$60 and then determined [#permalink]  06 Nov 2010, 13:32
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Question Stats:

58% (02:19) correct 42% (01:02) wrong based on 238 sessions
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
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Re: Profit from a Jacket [#permalink]  06 Nov 2010, 13:38
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60*1.25=75
75*0.8=60
60-60=0
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Re: Profit from a Jacket [#permalink]  06 Nov 2010, 20:34
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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 = $$64 - 60 = 4$$.

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Re: percentages [#permalink]  11 Dec 2011, 20:50
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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 $64. I hope that helps! _________________ Bhavin Parikh Magoosh Test Prep Manager Joined: 26 Apr 2011 Posts: 230 Followers: 0 Kudos [?]: 34 [1] , given: 12 Re: percentages [#permalink] 11 Dec 2011, 21:38 1 This post received KUDOS OA is C purchase price + 25% selling price= 100% selling price 60+ 25% SP= 100% SP 60= 75% SP s0 100 % SP =80 now 20 % sale means 20 % of 80 = 16 so he sold the jacket at 80-16 = 64$
total profit = 64-60 = 4 $Senior Manager Joined: 18 Sep 2009 Posts: 359 Followers: 3 Kudos [?]: 245 [0], given: 2 Re: percentages [#permalink] 12 Dec 2011, 08:41 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 Math Expert Joined: 02 Sep 2009 Posts: 30376 Followers: 5087 Kudos [?]: 57260 [0], given: 8811 Re: A merchant purchased a jacket for$60 and then determined [#permalink]  19 Aug 2013, 01:00
Expert's post
Bumping for review and further discussion.
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Re: A merchant purchased a jacket for $60 and then determined [#permalink] 25 Nov 2013, 22:03 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 _________________ Kindly press "+1 Kudos" to appreciate GMAT Club Legend Joined: 09 Sep 2013 Posts: 7283 Followers: 384 Kudos [?]: 93 [0], given: 0 Re: A merchant purchased a jacket for$60 and then determined [#permalink]  19 Feb 2015, 02:41
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Re: A merchant purchased a jacket for $60 and then determined [#permalink] 18 Jul 2015, 00:39 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, 00:39
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