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# PS-Discount/Marked price

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Intern
Joined: 15 Aug 2004
Posts: 33
Followers: 1

Kudos [?]: 0 [0], given: 0

PS-Discount/Marked price [#permalink]  01 Sep 2004, 18:26
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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
 Kaplan GMAT Prep Discount Codes Knewton GMAT Discount Codes Veritas Prep GMAT Discount Codes
GMAT Club Legend
Joined: 07 Jul 2004
Posts: 5068
Location: Singapore
Followers: 23

Kudos [?]: 195 [0], given: 0

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%
Director
Joined: 20 Jul 2004
Posts: 593
Followers: 1

Kudos [?]: 54 [0], given: 0

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.
GMAT Club Legend
Joined: 07 Jul 2004
Posts: 5068
Location: Singapore
Followers: 23

Kudos [?]: 195 [0], given: 0

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%
SVP
Joined: 16 Oct 2003
Posts: 1813
Followers: 4

Kudos [?]: 56 [0], given: 0

110*105/100 = 115.5. so 15.5 accorrding to me.[/b]
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