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Intern
Joined: 15 Aug 2004
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PS-Discount/Marked price [#permalink]
 01 Sep 2004, 19:26
Question Stats:
0% (00:00) correct
 0% (00:00) wrong based on 0 sessions
hi guyz,
Kicking off with my first post to the club on PS-
Would try to contribute henceforth on regular basis-
Here we go-
A trader allows a discount of 5% for cash payment. How much % above the cost price must he mark his goods to make a profit of 10% ?
Am not sure if such Q's crop up in the gmat but thought of posting it ..!!!
Raja
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GMAT Club Legend
Joined: 07 Jul 2004
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Location: Singapore
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Assuming original cost is n
discount of 5% means selling price is now 0.95n
To make a profit of 10%, (selling price - cost price)/cost price *100% = 10%
Assuming we are marking up the cost price by y%, so
((1+y)n - n)/n = 0.1
n+ny-n/n = 0.1
y = 0.1 = 10%
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Director
Joined: 20 Jul 2004
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ywilfred, if u sell for 10% more price (say $110 for a $100 item), then the 5% discount on top of this would bring your profit down from 10%.
Let Y be the % to increase the SP to get 10% profit with 5% discount.
Let CP = 100
CP = 100
SP = 100+Y
Discounted SP = (95/100)(100+y)
To get an effective 10% profit,
(95/100)(100+y) - 100 = 10
y = 15.6%
He should mark up his price by 15.6%, so that after 5% cash discount, he gets an effective 10% profit.
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GMAT Club Legend
Joined: 07 Jul 2004
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Let me solve it another way to confirm, I'll use the famous number substitution
Cost price = $100
Marked up by x%, so needs to mark up by (x/100)*100 = $x
SO marked up price is $(x+100)
If cash payment is made, 5% discount, so selling price is 0.95(x+100)
% Profit = (selling price-cost price)/cost price *100%
10% = (0.95x+95 - 100)/100 * 100%
(0.95x - 5)/100 = 0.1
0.95x = 15
x = 15.7%
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SVP
Joined: 16 Oct 2003
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110*105/100 = 115.5. so 15.5 accorrding to me.[/b]
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