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A merchant purchased a jacket for $60 and then determined

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A merchant purchased a jacket for $60 and then determined [#permalink] New post 06 Nov 2010, 13:32
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Question Stats:

54% (02:21) correct 46% (01:02) wrong based on 180 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] New post 06 Nov 2010, 13:38
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60*1.25=75
75*0.8=60
60-60=0
the answer is A
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Re: Profit from a Jacket [#permalink] New post 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 = \($64 - $60 = $4\).

Answer: C.
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Re: percentages [#permalink] New post 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!
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Re: percentages [#permalink] New post 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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Re: percentages [#permalink] New post 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
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Re: A merchant purchased a jacket for $60 and then determined [#permalink] New post 19 Aug 2013, 01:00
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Re: A merchant purchased a jacket for $60 and then determined [#permalink] New post 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
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Re: A merchant purchased a jacket for $60 and then determined [#permalink] New post 19 Feb 2015, 02:41
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Re: A merchant purchased a jacket for $60 and then determined   [#permalink] 19 Feb 2015, 02:41
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