A merchant purchased a jacket for $60 and then determined a selling price that equalled the purchase price of the jacket plus a markup that was 25 percent of the selling price. During a sale, the merchant discounted the selling price by 20 percent and sold the jacket. What was the merchant’s gross profit on this sale?
Easy one. Let SP be x.
SP = x = 60 + (.25)x
x = 80.
SP after discount was (0.8)x = 64. Therefore, 4$ profit.
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