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PS1000 Sec7#20

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PS1000 Sec7#20 [#permalink] New post 19 Apr 2009, 20:08
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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
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Re: PS1000 Sec7#20 [#permalink] New post 20 Apr 2009, 18:36
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?
_________________

-talent is the desire to practice-

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Re: PS1000 Sec7#20 [#permalink] New post 22 Apr 2009, 07:53
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


cost price=$60

let Selling price=y
y=$60+ .25y
y=$80

Now discount =.20y
So.. the actual selling price= .80* $80 = $64
So, profit = $4

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Re: PS1000 Sec7#20 [#permalink] New post 26 Apr 2009, 23:02
Thanks to both of you!! It's that simple. Guess I over read the ques till I got confused. :)

OA is $4 (C)
Re: PS1000 Sec7#20   [#permalink] 26 Apr 2009, 23:02
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PS1000 Sec7#20

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