guerrero25 wrote:

A dishonest person wants to make a profit on the selling of milk. He would like to mix water (costing nothing) with milk costing 33 $ per litre so as to make a profit of 20% on cost when he sells the resulting milk and water mixture for 36$. In what ratio should he mix the water and milk?

(A) 1:20

(B) 1:10

(C) 1:8

(D) 1:4

(E) 1:2

Dear

guerrero25,

I'm happy to help with this.

First of all, let's consider 1 liter of the stuff he is going to sell --- naive customers think it's pure milk, but we know it's some milk-water mixture. He is going to sell this liter of milk-water for $36.

This $36 should be a 20% increase over cost. Here, we need to think about percentage increases as multipliers. See this blog for more info:

http://magoosh.com/gmat/2012/understand ... -the-gmat/Using multipliers

(cost)*1.20 = $36

cost = 36/1.2 = 360/12 = $30

If he wants a 20% increase over cost on the sale of one liter of his milk-water, the cost has to be $30.

Well, a liter of milk costs $33, so if he is going to use just $30 of milk in his mixture, that's 30/33 = 10/11 of a liter. If milk is 10/11 of the liter, then water is 1/11 of the liter, and the ratio of water to milk is 1:10. Answer choice

(B)Does all this make sense?

Mike

_________________

Mike McGarry

Magoosh Test Prep

Education is not the filling of a pail, but the lighting of a fire. — William Butler Yeats (1865 – 1939)