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Intern
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A used-car dealer sold one car at a profit of 25% of the [#permalink]
 12 May 2007, 15:12
A used-car dealer sold one car at a profit of 25% of the dealer's purchase price for that car and sold another car at a loss of 20% of the dealer's purchase price for that car. If the dealer sold each car for $20,000, what was the dealer's total profit or loss, in dollars, for the two transactions combined?
a. 1000 profit
b. 2000 profit
c. 1000 loss
d. 2000 loss
e. 3334 loss
OA is C
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Senior Manager
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how did you get 1000 loss?
I got 1000 profit for an answer.
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Intern
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i dont even know how to do the problem...could someone please explain?
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Senior Manager
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I don't know if it's a trick-problem (at least to me it looks like a normal problem).
Ok, there are two cars 20K each. First transaction 25% profit (20,000*0.25=5,000). Second transaction 20% loss (20,000*0.2=4,000)
After two transactions we get 5000profit-4000loss=1000profit
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Intern
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but it should be 25% of the dealer's purchase price. 20,000 is the amount the dealer sold the car for. isnt that 2 different things?
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Senior Manager
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Ok, I get it now.
X-original price of the car
then
First transaction X*1.25=20,000 X=20000/1.25 then the original price of the car is 16000. profit is 4000
Second transaction X*(1-0.2)=20000 X=20000/0.8 then the original price of the car is 25000. loss is 5000
so the difference is 1000loss
answer is C
p.s. thanks for correcting me, I need to pay more attention
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