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Manager  Joined: 21 Aug 2014
Posts: 136
GMAT 1: 610 Q49 V25 GMAT 2: 730 Q50 V40 A dealer offers a cash discount of 20%. Further, a customer bargains a  [#permalink]

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Difficulty:   75% (hard)

Question Stats: 58% (02:28) correct 42% (02:49) wrong based on 357 sessions

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A dealer offers a cash discount of 20%. Further, a customer bargains and receives 20 articles for the price of 15 articles. The dealer still makes a profit of 20%. How much percent above the cost price were his articles marked?

A) 100%
B) 80%
C) 75%
D) 66+2/3%
E) 50%
GMAT Tutor G
Joined: 24 Jun 2008
Posts: 1829
A dealer offers a cash discount of 20%. Further, a customer bargains a  [#permalink]

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5
5
When you buy 2 things for the price of 1, you get each thing at 1/2 price. Similarly, when you buy 20 things for the price of 15, you get each thing at 15/20 = 3/4 of its normal price.

So in this question, the buyer gets two separate discounts - because he gets 20 for the price of 15, that reduces the overall price to 3/4 of its original value. And the buyer gets a further 20% cash discount, which reduces the price again by 1/5, so to 4/5 of its previous value. So combining the two discounts, the buyer gets each item at (3/4)(4/5) = 3/5 of its original sales price. If s is the original sales price, the buyer buys each item for (3/5)s dollars. We know this is 20% more than what the seller paid for each item, so it is 6/5 of what the seller paid. If the seller paid p dollars, then

(3/5)s = (6/5)p
s = 2p

and the sales price is double the purchase price, and the markup is 100%.

You can also solve by just inventing a simple number for the original sales price, though I find this a bit more confusing than the more algebraic solution above. Say the original sales price is $10. We know the seller gives a 20% discount, so the buyer is paying$8 for the 15 items, or $120 in total. But then the seller offers 20 items instead of 15, so the buyer pays 120/20 =$6 per item. The seller still turns a 20% profit, and since $6 is 20% more than$5, the seller must have bought each item for $5. Since the number we chose,$10, for the sale price is 100% bigger than $5, then 100% is the markup. _________________ GMAT Tutor in Toronto If you are looking for online GMAT math tutoring, or if you are interested in buying my advanced Quant books and problem sets, please contact me at ianstewartgmat at gmail.com Originally posted by IanStewart on 21 Jun 2015, 23:24. Last edited by IanStewart on 22 Aug 2019, 05:58, edited 1 time in total. ##### Most Helpful Community Reply Manager  Joined: 10 Feb 2014 Posts: 81 GMAT 1: 690 Q50 V33 A dealer offers a cash discount of 20%. Further, a customer bargains a [#permalink] ### Show Tags 4 4 Good question...2:11 min Marked Price (M) = Cost Price (C) + Mark up...(EQN. A) Selling price = 20% Discount over M = 0.8*M Given that, a customer bargains and receives 20 articles for the price of 15 articles--> *a further loss of 25% to the dealer--> BUT a NET PROFIT of 20% over cost price (C) 0.75 * 0.8 * M = 1.2 * C Hence, M/C = 2/1 = 200% From Eqn. A , (C + Mark up)/C = 200% --> Mark up / C = 100% Ans. A *How to arrive at 25% loss without much ado...%Loss = Goods sold in excess (5) / Goods sold (20). Similarly if the dealer were sly enough to sell 15 for the price of 20, percentage profit = Goods left/Goods sold = 5/15 = 33.3% Originally posted by itzmyzone911 on 22 Jun 2015, 03:20. Last edited by itzmyzone911 on 22 Jun 2015, 10:36, edited 1 time in total. ##### General Discussion Manager  Joined: 21 Aug 2014 Posts: 136 GMAT 1: 610 Q49 V25 GMAT 2: 730 Q50 V40 Re: A dealer offers a cash discount of 20%. Further, a customer bargains a [#permalink] ### Show Tags IanStewart wrote: When you buy 2 things for the price of 1, you get each thing at 1/2 price. Similarly, when you but 20 things for the price of 15, you get each thing at 15/20 = 3/4 of its normal price. So in this question, the buyer gets two separate discounts - because he gets 20 for the price of 15, that reduces the overall price to 3/4 of its original value. And the buyer gets a further 20% cash discount, which reduces the price again by 1/5, so to 4/5 of its previous value. So combining the two discounts, the buyer gets each item at (3/4)(4/5) = 3/5 of its original sales price. If s is the original sales price, the buyer buys each item for (3/5)s dollars. We know this is 20% more than what the seller paid for each item, so it is 6/5 of what the seller paid. If the seller paid p dollars, then (3/5)s = (6/5)p s = 2p Thank you much for the explanation. I normally prefer method 1 too! But since this discount concept is a bit new, I have two questions: 1) Why is it that when you buy 20 things for the price of 15, you get each thing at 15/20 = 3/4 of its normal price. Why is it not 3/4 "off" the normal price? 2) Also, why are s and p different. Should not they be equal? GMAT Tutor G Joined: 24 Jun 2008 Posts: 1829 Re: A dealer offers a cash discount of 20%. Further, a customer bargains a [#permalink] ### Show Tags Patronus wrote: But since this discount concept is a bit new, I have two questions: 1) Why is it that when you buy 20 things for the price of 15, you get each thing at 15/20 = 3/4 of its normal price. Why is it not 3/4 "off" the normal price? You might think of a simpler numerical example first. Say you want to buy 3 apples, and each apple costs$1. That would normally cost you $3 in total. But if the seller gives you an extra apple for free, so you get 4 apples for the price of 3, then you only pay$3/4 = $0.75 per apple. So each apple costs you 3/4 of what it would normally cost, or in other words, you get 1/4 off the price of each apple. Similarly in this question, if we get 20 things for the price of 15, each thing costs 15/20 of what it normally would (so we get a discount of 5/20 = 1/4 = 25% "off" the price of each thing). Patronus wrote: 2) Also, why are s and p different. Should not they be equal? When someone is selling something at a markup, or at a profit, they bought it at one price (p in my example, sometimes called the 'purchase price'), and they sell it at a higher price (s in my example, sometimes called the 'sale price' or 'selling price'). So if someone makes a profit or marks up an item, it must be true that s > p. Again you might look at a simpler numerical example first - if you buy a television for$100 and sell it for $160, then p = 100 and s = 160, and your percent profit is 60%. The question you posted is a bit confusing, because the seller first marks up the price, then discounts the price, and we need to use the discounted price to work out the profit. _________________ GMAT Tutor in Toronto If you are looking for online GMAT math tutoring, or if you are interested in buying my advanced Quant books and problem sets, please contact me at ianstewartgmat at gmail.com Manager  Joined: 21 Aug 2014 Posts: 136 GMAT 1: 610 Q49 V25 GMAT 2: 730 Q50 V40 Re: A dealer offers a cash discount of 20%. Further, a customer bargains a [#permalink] ### Show Tags Thank you once again for clarifying! I am learning new way to do Quant with your help. IanStewart wrote: You might think of a simpler numerical example first. Say you want to buy 3 apples, and each apple costs$1. That would normally cost you $3 in total. But if the seller gives you an extra apple for free, so you get 4 apples for the price of 3, then you only pay$3/4 = $0.75 per apple. So each apple costs you 3/4 of what it would normally cost, or in other words, you get 1/4 off the price of each apple. Similarly in this question, if we get 20 things for the price of 15, each thing costs 15/20 of what it normally would (so we get a discount of 5/20 = 1/4 = 25% "off" the price of each thing). I tried understanding this using algebra. E.g.: 20 $$p_1$$ = 15 $$p_2$$ 4 $$p_1$$ = 3 $$p_2$$ $$p_2$$ = $$\frac{4}{3}$$$$p_1$$ So, for every$1 I am paying 4/3 after the 2nd case.

I don't understand why isn't this value 3/4 as per your logic.
Intern  Joined: 10 Aug 2014
Posts: 48
GMAT 1: 680 Q49 V34 Re: A dealer offers a cash discount of 20%. Further, a customer bargains a  [#permalink]

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Solve it backwords.

Say the dealer cost is 100$, and he sold the items with 20% marginn, thus 120$ it was price.
But for 120$the customer bought 15 items for the price of 20, we need to find out original price. 120$/15 is the price per piece we need to find out how much is 20. 120/15=8*20=160.
So the price of each of the 15 items was - $8 there was a 20% discount on the 20 items bought for 120 so 20 items sold at$100. (each item at $5) Dealer still made a profit of 20% on$5 item so that means the cost to produce each item was $4. Original markup was$8. And each item was produced with $4. So 100% markup. Let the Marked Price for 1 item be 100----For 20 items its 2000 After initial cash disc of 20%, Sale Price of 1 item is 80 and 20 items is 1600 For 20 Items price paid will be 1600; For 15 items it would have been 1200, so by paying 1200 he bought 20 items whose price before cash discount was 2000 The final payment of 1200 still has 20% profit in it, thus Cost Price is 1000 as against Marked Price of 2000    Senior Manager  G Joined: 18 Jun 2016 Posts: 253 Location: India GMAT 1: 720 Q50 V38 GMAT 2: 750 Q49 V42 GPA: 4 WE: General Management (Other) Re: A dealer offers a cash discount of 20%. Further, a customer bargains a [#permalink] ### Show Tags 3 Patronus wrote: A dealer offers a cash discount of 20%. Further, a customer bargains and receives 20 articles for the price of 15 articles. The dealer still makes a profit of 20%. How much percent above the cost price were his articles marked? A) 100% B) 80% C) 75% D) 66+2/3% E) 50% Shortest Method Here.. Marked Price = M.P. Cost Price = C.P. Selling Price = S.P. Disc. offered on M.P. = 20% Bargain Disc. = $$\frac{(5*100)}{20}$$ = 25% Total Discount on M.P. = -20 - 25 + $$\frac{(20 * 25)}{100}$$ = -45 + 5 = -40% (Successive Percentage Change) This means that Total Discount Offered by Dealer on M.P. = 40% => S.P. = 0.6 M.P. Dealer Makes a 20% Profit. => S.P. = 1.2 * C.P. Equating S.P. => 0.6 M.P. = 1.2 C.P. => M.P. = 2 * C.P. Therefore, Mark up = 100% P.S: Formula for Successive Percentage Change => a + b + $$\frac{ab}{100}$$. In this question, a = -20%; b = -25% And, ab = (-20) (-25) = +500 Veritas Prep GMAT Instructor V Joined: 16 Oct 2010 Posts: 9850 Location: Pune, India Re: A dealer offers a cash discount of 20%. Further, a customer bargains a [#permalink] ### Show Tags Patronus wrote: A dealer offers a cash discount of 20%. Further, a customer bargains and receives 20 articles for the price of 15 articles. The dealer still makes a profit of 20%. How much percent above the cost price were his articles marked? A) 100% B) 80% C) 75% D) 66+2/3% E) 50% For more on this concept, check: http://www.veritasprep.com/blog/2014/09 ... questions/ _________________ Karishma Veritas Prep GMAT Instructor Learn more about how Veritas Prep can help you achieve a great GMAT score by checking out their GMAT Prep Options > Senior Manager  G Joined: 18 Jun 2016 Posts: 253 Location: India GMAT 1: 720 Q50 V38 GMAT 2: 750 Q49 V42 GPA: 4 WE: General Management (Other) Re: A dealer offers a cash discount of 20%. Further, a customer bargains a [#permalink] ### Show Tags VeritasPrepKarishma wrote: Patronus wrote: A dealer offers a cash discount of 20%. Further, a customer bargains and receives 20 articles for the price of 15 articles. The dealer still makes a profit of 20%. How much percent above the cost price were his articles marked? A) 100% B) 80% C) 75% D) 66+2/3% E) 50% For more on this concept, check: http://www.veritasprep.com/blog/2014/09 ... questions/ Thanks for the link but I do have 1 issue in that solution and no its not a technical one; it is an execution-al issue.. I do understand that you have calculated the answer without computing the Second discount (pic attached) but I am not sure whether I would want to do things in such a complex manner at the end. I see a lot of room for error in thinking and I have always found it better to do things on paper in a manner as simple as possible because of all the pressure and tension that mounts up during the exam. Attachments Capture.JPG [ 42.9 KiB | Viewed 9462 times ] Manager  S Joined: 23 May 2017 Posts: 231 Concentration: Finance, Accounting WE: Programming (Energy and Utilities) Re: A dealer offers a cash discount of 20%. Further, a customer bargains a [#permalink] ### Show Tags A dealer offers a cash discount of 20%. Further, a customer bargains and receives 20 articles for the price of 15 articles. The dealer still makes a profit of 20%. How much percent above the cost price were his articles marked? Cost Price = X Selling Price = Y After 1st discount = 0.8Y to find the 2nd discounted price, we must solve the equation given = 20 * ( 2nd price) = 15 * 0.8y 2nd Discounted price = 12/20 y = 0.6y Given - Dealer makes 20% profit even on this discounted price which means 0.6y = 1.2x or y = 2x : which means the selling prices is marked 100% above the cost price - Ans A Manager  P Joined: 13 Jun 2012 Posts: 198 Location: United States WE: Supply Chain Management (Computer Hardware) A dealer offers a cash discount of 20%. Further, a customer bargains a [#permalink] ### Show Tags 1 VeritasPrepKarishma wrote: Patronus wrote: A dealer offers a cash discount of 20%. Further, a customer bargains and receives 20 articles for the price of 15 articles. The dealer still makes a profit of 20%. How much percent above the cost price were his articles marked? A) 100% B) 80% C) 75% D) 66+2/3% E) 50% For more on this concept, check: http://www.veritasprep.com/blog/2014/09 ... questions/ Hello Karishma, I did it in a different way not sure if it is correct I took 1 articles priced at$100 . 20 articles *100= 2000 now he sold for 20% discount hence 20*80=1600. Further she bough it for the price of 15 articles hence 15*80=1200 this is selling price. It is also told the vendor made 20% profit. We know Selling Price= Cost+Markup, 1200= C +C/5; C= 1000.

From here we know the cost is 1000 and the selling price was 2000. 100%
Veritas Prep GMAT Instructor V
Joined: 16 Oct 2010
Posts: 9850
Location: Pune, India
Re: A dealer offers a cash discount of 20%. Further, a customer bargains a  [#permalink]

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1
Turkish wrote:
VeritasPrepKarishma wrote:
Patronus wrote:
A dealer offers a cash discount of 20%. Further, a customer bargains and receives 20 articles for the price of 15 articles. The dealer still makes a profit of 20%. How much percent above the cost price were his articles marked?

A) 100%
B) 80%
C) 75%
D) 66+2/3%
E) 50%

For more on this concept, check: http://www.veritasprep.com/blog/2014/09 ... questions/

Hello Karishma,

I did it in a different way not sure if it is correct

I took 1 articles priced at $100 . 20 articles *100= 2000 now he sold for 20% discount hence 20*80=1600. Further she bough it for the price of 15 articles hence 15*80=1200 this is selling price. It is also told the vendor made 20% profit. We know Selling Price= Cost+Markup, 1200= C +C/5; C= 1000. From here we know the cost is 1000 and the selling price was 2000. 100% Yes, this is correct. You are just going back and applying the two discounts one by one and then reducing by the profit to get the cost price. _________________ Karishma Veritas Prep GMAT Instructor Learn more about how Veritas Prep can help you achieve a great GMAT score by checking out their GMAT Prep Options > Intern  B Joined: 03 Apr 2017 Posts: 2 Re: A dealer offers a cash discount of 20%. Further, a customer bargains a [#permalink] ### Show Tags not sure if this logic makes sense: Let's say the original selling price of item was$100.
20% discount: $100 -$20 = $80 20 for the price of 15 = 25% discount:$80 - 20 = $60 profit margin is still 20% of$60 = $12$60-$12 =$48 cost of item = approx. 100% markup
Senior Manager  P
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Schools: XLRI"20
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A dealer offers a cash discount of 20%. Further, a customer bargains a  [#permalink]

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Let m marked price, c be original cost price

given 20% discount of marked price and bargain of 20 articles for the marked price of 15 articles, yet 20% profit on original cost price of 20 articles

15 * 0.8 m = 1.2 * 20 * c
m = (24/12)c => m = 2c

so original cost price is marked up by 100 % (A)
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Re: A dealer offers a cash discount of 20%. Further, a customer bargains a  [#permalink]

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Patronus wrote:
A dealer offers a cash discount of 20%. Further, a customer bargains and receives 20 articles for the price of 15 articles. The dealer still makes a profit of 20%. How much percent above the cost price were his articles marked?

A) 100%
B) 80%
C) 75%
D) 66+2/3%
E) 50%

Good Question... +1 to you..!!

Discount = MP - SP. As per the question, $$SP = 0.8MP$$
Also, we have $$6CP = 5SP$$... But while selling the Articles he takes a loss of 0.25
$$6C.P. [m]= 0.75SP$$ = $$0.75*0.8*MP$$
[/m]MP = 2CP... Hence, MP is 100% above the Cost Price.
SVP  D
Joined: 03 Jun 2019
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A dealer offers a cash discount of 20%. Further, a customer bargains a  [#permalink]

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Patronus wrote:
A dealer offers a cash discount of 20%. Further, a customer bargains and receives 20 articles for the price of 15 articles. The dealer still makes a profit of 20%. How much percent above the cost price were his articles marked?

A) 100%
B) 80%
C) 75%
D) 66+2/3%
E) 50%

Given: A dealer offers a cash discount of 20%. Further, a customer bargains and receives 20 articles for the price of 15 articles. The dealer still makes a profit of 20%.

Asked: How much percent above the cost price were his articles marked?

Let the marked selling price be x and cost price be c

$$80% * \frac{15}{20} x = 1.2 c$$

$$\frac{x}{c} = \frac{1.2}{.8} *\frac{20}{15} = \frac{3}{2}*\frac{4}{3} = 2$$

How much percent above the cost price were his articles marked =$$\frac{2-1}{1} = 100\%$$

IMO A
Intern  B
Joined: 10 Jun 2014
Posts: 21
Re: A dealer offers a cash discount of 20%. Further, a customer bargains a  [#permalink]

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Hi Guys,

Let me know if my method of solving this question is correct.

Let INR 100 be the initial selling price.
Initial discount taken by the customer is 20%. Thus, effective selling price becomes INR 80.

If the seller had sold 15 goods at INR 80, then he would have made INR 1200. But he sold 20 goods and made INR 1200 so his effective selling price was INR 60 instead of INR 80.

At this selling price he made a profit of 20%, thus his original cost price would have been 60/1.2 i.e INR 50.

And initially he was selling is goods at INR 100 which is at a 100% markup from INR 50. Re: A dealer offers a cash discount of 20%. Further, a customer bargains a   [#permalink] 14 Aug 2019, 17:54
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# A dealer offers a cash discount of 20%. Further, a customer bargains a  