joyseychow wrote:

This is simple but I can't seem to get around this one. Especially with "determined a selling price that equaled the purchase price of the jacket plus a markup that was 25 percent of the selling price". Appreciate if someone could explain.

A merchant purchased a jacket for $60 and then determined a selling price that equaled 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

the equation for "a selling price that equaled the purchase price of the jacket plus a markup that was 25 percent of the selling price"

Selling Price = S

S= (purchase price) + 25/100(S)

S= 60 + 0.25S

0.75S = 60

s= 80

At the sale new selling price = 0.8S (20% less than original selling price)

Therefore new sale price is = (0.8)60 = 64

therefore gross profit is 64 - 60 = 4.

C. (its better/faster to work with fractions and you don't really need to solve for S - just compute the final figure and then deduct)

OA?

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